UPDATE: The DOL did not file a delay notice in the Federal Register on Feb. 7.
Despite the awkward rollout of President Donald J. Trump’s policy strategy for the Department of Labor fiduciary rule, officials say the president remains committed to killing the regulation.
In fact, a 180-day delay could be announced by the DOL as soon as Tuesday, said Erin Sweeney of the Washington, DC-based law firm Miller & Chevalier. Sweeney previously served as senior benefit law specialist for the Office of Regulations and Interpretations at the U.S. Department of Labor.
“I haven't heard anything definite, but I do expect the DOL to announce a 180-day delay sometime this week,” she said via email.
If so, the DOL will accomplish what the White House initially set out to do last week.
Trump presided over a dual-signing ceremony Friday afternoon that was intended as a show of opposition to financial services regulation. The president was to sign orders directing staff to review Dodd-Frank legislation and delay the DOL rule for 180 days.
Top economic advisor Gary Cohn said the administration was committed to eliminating the DOL rule. Rep. Ann Wagner, R-Mo., a persistent critic of the rule, attended the signing ceremony and tweeted follow-up congratulations to Trump for delaying the rule.
The only problem is the president didn’t actually order the 180-day delay. Language to that effect was removed from the order before it made it to the signing ceremony.
Lawyers objected to the administration-ordered delay, a House source said. While the law allows for the delay of effective dates, the DOL rule was officially published in the Federal Register last June, meaning it is effective.
The rule – which extends a fiduciary duty to anyone working with retirement funds -- will apply to advisors and agents on April 10.This is known as its “applicability date.”
The administration’s legal team convinced the White House to back off challenging the definitions of “effective” and “applicability.” Instead, the DOL is expected to publish a delay order in the Federal Registry either Tuesday or Wednesday.
In the meantime, the Trump memo directs the Labor secretary to undertake a new “economic and legal analysis” to evaluate whether the rule “it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule.”
To the extent that the new analysis reveals problems, the labor secretary is directed to “publish for notice and comment a [new] proposed rule rescinding or revising the rule.”
Trump’s labor secretary nominee, fast food CEO Andrew Puzder, is expected to have his confirmation hearing later this month.
The DOL could opt to publish a new rule reversing the fiduciary rule. That is a long process that includes public hearings and public comment periods.
In other legal news, Judge Barbara M.G. Lynn will issue a ruling by Friday on the U.S. Chamber of Commerce lawsuit to kill the fiduciary rule. Lynn heard arguments Nov. 17 in Dallas.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]