DOL to Seek 180-Day Fiduciary Rule Delay, Say Sources
The Department of Labor appears to be yielding to president Donald Trump’s memorandum issued last week to review its proposed fiduciary rule, according to Reuters.
In two separate documents, the agency is seeking approval from the Office of Management and Budget to delay the rule’s implementation and open it up to public comment once again, sources familiar with the matter tell the newswire.
The first document outlines a 180-day delay of the rule, which requires retirement brokers to put clients’ interests ahead of their own, Reuters writes. This proposal would also entail a comment period of 15 days or more, according to the newswire. But the DOL’s second document would initiate an entirely new public comment period on the rule itself, Reuters writes.
The rule, originally proposed in 2010 and re-submitted in April 2015, was finally scheduled to go into effect this April. But last week Trump requested a review of the rule, paving the way for an eventual delay or outright repeal, although many large brokerages, including Morgan Stanley, LPL, Merrill Lynch and Wells Fargo, are going through with plans set in motion to comply with the rule, as reported previously.
News of the DOL’s proposal to revisit the rule comes on the heels of another court victory against the rule’s opponents. On Wednesday, a Texas federal judge rejected a challenge from the U.S. Chamber of Commerce and Sifma that claimed the DOL overstepped its authority by approving the rule. Lawyers say the court decision makes the "odds longer" that the rule will be axed altogether, Law360 reports.
The win marked the DOL’s fourth victory in the courts. In December, a federal appeals court refused an injunction pending appeal sought by the National Association for Fixed Annuities, which had lost its bid to delay the rule’s implementation the month prior. That same month, a Kansas judge denied a preliminary injunction request from insurer Market Synergy. Meanwhile, a coalition of pro-environment and pro-worker groups is suing to block Trump’s executive order issued last month requiring the repeal of two regulations for each new one. That order covers financial regulators, including the DOL but not independent agencies like the SEC.
The DOL is currently without a full time secretary. The senate nomination hearing for Trump’s pick, Andy Puzder has been delayed several times but is now set for February 16, reports NBC News.
Senate Minority Leader Chuck Schumer has called for the withdrawl of Puzder’s nomination, citing his record as CEO of CKE Restaurants, manager of Hardee’s and Carl’s Jr., and his stance on labor issues, CNN reports.