Warren also contributed to breaking a five-year logjam over a Department of Labor effort to
expand investor protection for retirement accounts. At the beginning of the year, the effort appeared to be foundering, derailed yet again by fierce financial services industry pushback.
Enter Warren. She held hearings, made speeches, and released attention-getting reports, with titles such as “Villas, Castles, and Vacations: How Perks and Giveaways Create Conflicts of Interest in the Annuity Industry” (
We wrote about it!), publicizing how financial advisers steered clients into investments that benefited their own bottom lines and still didn’t run afoul of current law. She drew attention to how the financial services industry paid academics to write studies that just happened to agree with their viewpoints on issues. (We—along with just about everyone else—
wrote about that too!)
The increased attention to a previously obscure regulatory issue ultimately pushed all the Democratic candidates to announce their support for the proposed change, which is known as the fiduciary standard. That included Sanders, who in 2010 signed a letter
opposing a previous version of the revised standard of customer care, claiming it would burden Vermont companies offering workers employee stock ownership plans. A finalized rule is expected from the Department of Labor in 2016.
On the issue of college affordability, this year, as in years past, Warren
introduced legislation that would
permit student loan borrowers to refinance at lower rates. Like with Social Security, Congress
dinged Warren’s student-loan initiative. But in the Democratic primaries, the debate is now over whether tuition at public colleges should be free, as Sanders advocates, or if families should be required to pay what they can afford, as Clinton supports. “She succeeded in pushing the debate on student loans to the left,”
declared Politico’s Allie Grasgreen.
In other areas, Warren’s produced bottom-line action and results for individual people. When Corinthian Colleges, a for-profit chain, closed earlier this year amid widespread allegations students were tricked into taking on loans to attend the school by recruiters lying about job placement rates, advocacy groups spent months lobbying the Obama administration to set up a process for the now former students to apply for debt forgiveness.
Left unresolved: the tax consequences of officially voiding the loan. Tax law counts forgiven debt as income and bills accordingly. It appeared the students whose debt was dismissed would need to once again prove they were victims of fraud, but this time not to the Department of Education but to the Internal Revenue Service. It took months of pressure to get the IRS to agree not to pursue the claims. Would this have happened without Warren? The
Huffington Post says no.
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