DOL Scores Court Win for Fiduciary Rule
A Texas federal judge has ruled in favor of the Department of Labor’s fiduciary rule, which requires retirement brokers to put clients’ interests first and is scheduled to go into effect in April, in yet another legal win against its opponents, Law360.com writes.
U.S. District Judge Barbara Lynn rejected a challenge from the U.S. Chamber of Commerce and other industry groups, ruling that the DOL didn’t exceed its authority by approving the rule, according to the legal news website. The ruling came a few hours after the Labor Department had asked a stay in the case, prompted by last week’s memorandum from president Donald Trump to review the rule and possibly repeal it, Law360.com writes.
In her ruling yesterday, Lynn wrote that the DOL acted appropriately thanks to the power to “regulate a significant portion of the American economy” granted to the agency by Congress, the Wall Street Journal writes. The Chamber issued a statement in response to the ruling, saying it will continue to pursue all available channels to rescind the rule, according to the Journal.
The Chamber, along with the Sifma, had filed their claim against the rule in June, as reported previously.
It was one of several lawsuits lobbed against the rule, but the DOL has been steadily beating them back.
In December, a federal appeals court refused an injunction pending appeal brought by the National Association for Fixed Annuities. In November, U.S. District Judge Randolph Moss had denied the annuities trade group’s request to delay the rule’s implementation. The same month, a Kansas judge refused to grant a preliminary injunction against the rule requested by insurer Market Synergy.
But the legal wins may not save the rule following last week’s presidential memorandum from Trump, the Journal writes. The president told the DOL to review the rule and a spokesman for the agency said they’re “exploring all options to delay” its applicability, originally set for April, the paper writes. On the other hand, the legal victories create a “stumbling block” for Trump and opponents of the rule, Erin Sweeney, an attorney at Miller & Chevalier Chartered, tells the Journal.
What’s more, several groups are suing to block Trump’s January 30 executive order requiring two regulations to be killed for each new one introduced, the Morning Consult writes. The Natural Resources Defense Council, Public Citizen and the Communications Workers of America filed a suit aimed at saving environmental and worker protection regulations, according to the web publication. But Trump’s order affects other agencies regulating finance, including the DOL, Morning Consult writes. The two-for-one order doesn’t apply to independent agencies such as the SEC or the Consumer Financial Protection Bureau, however, according to the web publication.