Alexander Acosta, nominated Thursday to lead the Department of Labor, drew praise today as a thoughtful, experienced candidate likely to express mainstream conservative views on regulations.
In other words, the perfect labor secretary to provide swift clarity to the financial services industry on the DOL fiduciary rule.
“There isn't much to indicate where he will stand on the fiduciary rule, except that, as a conservative, he is probably skeptical of regulation of business,” said Fred Reish of Drinker Biddle & Reath. “On the other hand, as a lawyer who has practiced and taught, he should have an appreciation of the difference between good regulation and bad, as opposed to a knee-jerk reaction against any and all regulation.”
Acosta was quickly nominated by President Donald J. Trump after his initial choice, restaurant CEO Andrew Puzder, withdrew from consideration.
Little is known about Acosta beyond his impressive resume. A former clerk to Justice Samuel Alito on the Third Circuit, Acosta holds undergraduate and law degrees from Harvard University. He is a former member of the National Labor Relations Board, a former U.S. attorney and current dean at Florida International University law school.
“I think he will sail through the Senate confirmation proceedings,” Reish said.
The resume and mainstream ideology were likely prime considerations in his selection. Several Trump cabinet appointees hold controversial views and/or carry hefty baggage, which made it easier for Democrats to hold up their confirmation.
On the Job Quickly
Acosta could be approved and on the job quickly, a matter of no small import when it comes to the fiduciary rule.
Last week, Trump ordered the DOL to review the fiduciary rule and decide whether a delay or a counter regulation is needed. The agency sent a request for a 180-day delay to the Office of Management and Budget.
If confirmed, Acosta and his assistant secretary of the DOL's Employee Benefits Security Administration will determine the future of the fiduciary rule.
“We expect (they) will work closely with the Trump Administration to carefully evaluate the fiduciary rule, seek input from stakeholders and determine whether to issue a modified proposed regulation,” said Erin Sweeney, a lawyer with Miller & Chevalier in Washington, D.C.
The flip side is that while Acosta’s extensive mainstream experience might get him confirmed quickly, he also might be averse to bold changes – such as a complete reversal of the fiduciary rule.
Published in the Federal Register in April 2016, the fiduciary rule is slated to begin taking effect April 10, 2017. The DOL won three federal court decisions affirming the rule in three different states. The agency also won on appeal in Washington, D.C. court.
Will those court decisions heavily influence Acosta?
“He has a reputation as a thoughtful, intelligent and incisive attorney,” Sweeney noted.
In 2010, Acosta advocated that the National Labor Relations Board shift from a “pre-World War II quasi-judicial administrative agency model” to one in which it would issue rules. “Rulemaking is a better, more democratic, more stable, more transparent, and more modern path for quasi-legislative enactments,” he wrote.
The NLRB “should learn from other agencies and it should hire staff experienced with the specific challenges of rulemaking,” Acosta said.
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].