Presidential candidateMichael Bloomberg. (Photo: Bloomberg News)

Presidential candidate Michael Bloomberg would restore the LaborDepartment's now-defunct fiduciary rule as well as institute a .01percent financial transaction tax, according to his just-released financial reform policy.

The three-term New York City mayor would also beef up theVolcker Rule and the Consumer FinancialProtection Bureau (CFPB), as well as "accelerate" the creation ofthe Consolidated Audit Trail, or CAT.

Discussing the now-defunct Labor Department fiduciary rule,Bloomberg said that "investment professionals who work oncommissions—such as brokers and insurance agents—often steerless-sophisticated customers into expensive financial products andaway from better, cheaper alternatives. The extra fees add up tobillions of dollars a year, money that would otherwise go towardensuring retirees' financial security."

Labor "issued a rule requiring such investment advisers todisclose conflicts and put clients' interests first. The Trumpadministration has reversed the rule," Bloomberg said.

Citing the "profound" impact the 2008 financial crisis had onthe economy and "how close it brought the world to economiccollapse—authorities everywhere should be doing all in their powerto fix the flaws it revealed," Bloomberg said. "Yet the Trumpadministration is rolling back what safeguards were put in place,and none of the candidates for president is offering a viablealternative."

The 0.1 percent tax on all financial transactions—includingstocks, bonds, and payments on derivative contracts—"would bephased in gradually, starting at 0.02 percent, to monitor andminimize any unintended consequences," according to Bloomberg'splan.

The Securities Industry and Financial Markets Association(SIFMA) reiterated Tuesday that it opposes a financial transactiontax. "A Financial Transaction Tax, or FTT, would tax middle-classsavers, including pension funds, 401(k)s, and IRAs," said KenBentsen, SIFMA's president and CEO, in a statement. "At a time whenmarket development, efficiency, and competition are driving thecost of investing toward zero, it makes little sense to increasethe cost through what is essentially a sales tax. Further,the threat such a tax poses to the efficiency of the U.S. capitalmarkets is real. It begs the question: What's thepoint?"

Under the Obama administration, the CFPB "did important work,"Bloomberg said, including designing new, simpler mortgagedocuments; collecting and publishing consumer complaints; andrecovering "tens of millions of dollars for wronged consumers andprosecuted cases such as the fake-accounts scandal at WellsFargo."

The Trump administration "has undermined the CFPB, reversingsome important rules and seeking to cut funding," Bloomberg said."And it lacks clear authority in problematic areas such as autolending and credit reporting."

Other notable components of Bloomberg's plan include requiringmore corporate disclosures involving climate risks and diversity, as well as college planning.

For instance, Bloomberg would:

• Automatically enroll new undergraduate borrowers inincome-based repayment plans, cap student debt payments at 5percent of disposable income, and ease enrollment for currentborrowers in income-based repayment plans.
• Cancel unpaid balances on government loans to borrowers whoattended failed for-profit colleges, relieve low- and middle-incomeborrowers of collection fees, and ban wage and Social Securitygarnishment and confiscation of tax refunds for defaultedborrowers.
• Make it easier to discharge student debt in bankruptcy.

Bloomberg has qualified for the Democratic presidential debatetomorrow night, his first. He is skipping the first four statenominating contests, hoping to make a big impact on March 3—SuperTuesday.

From: ThinkAdvisor