DOL Officially Delays Fiduciary Rule by at Least 60 Days
After months of uncertainty about the fate of its fiduciary rule and less than a week before its scheduled implementation date, the Department of Labor filed to delay the controversial regulation by 60 days, Reuters writes.
The rule, aimed at forcing retirement brokers to put clients’ interests first, was scheduled to go into effect April 10. The DOL will now perform a review of the rule to determine whether it could hurt Americans’ ability to get professional retirement advice, as its critics say, according to the agency’s filing with the Federal Register cited by Reuters. The review, prompted by a February 3 memorandum from president Donald Trump, is only expected to be completed by January 1, 2018, the agency added in its filing, according to the newswire.
In the meantime, the retirement advice industry is essentially off the hook until June 9, at least in regard to compliance: the DOL will not mandate any regulatory requirements as far as disclosures and compliance representations to investors until 2018, Reuters writes. And if during its review the DOL decides to revamp or repeal the rule, it’ll still have to go through another rule-making process, according to the newswire.
The decision comes a little over two weeks following the DOL’s two-week public comment period on the delay, which closed March 17. To what extent the DOL took those comments into account is unclear: the agency says it received 178,000 comments opposing the delay and 15,000 supporting it, according to Reuters.
But the agency says a delay is justified nonetheless because it needs time to conduct the review as directed by the president, the newswire writes. Putting the rule into effect as scheduled could cause “an unduly chaotic transition,” restrict or reduce advice services in the interim and sow confusion, the DOL said, according to Reuters.
Opponents of the rule, which include several large industry groups and prominent GOP lawmakers, continue pushing for an outright repeal. The Financial Services Institute said in a statement following the DOL’s delay announcement that the rule itself “is inconsistent with the administration’s goal” when it comes to Americans’ ability to save and invest, Wealth Management writes.
Meanwhile, Sen. Elizabeth Warren, D-Mass., who’s been a vehement supporter of the rule, plans to unveil a “Retirement Ripoff Counter” — a digital projection on the walls of several Washington, D.C., landmarks purportedly tallying the cost of the rule delay to American retirement savers, the web publication writes. Based on president Barack Obama administration’s estimates of so-called “conflicted” advice costing U.S. retirement savers $17 billion a year, the clock will tick up $40 million every day the rule is delayed, according to Wealth Management.