AARP, States Seek to Revive DOL Fiduciary Rule

The federal government might not appeal to restore the controversial Department of Labor fiduciary rule, which was tossed out by a New Orleans court last month, but a coalition of pro-fiduciary groups are spoiling for a fight.

Politico Pro reports that AARP will appeal the Fifth Circuit Court of Appeals' ruling because it fears the Trump administration will not. The federal government has until the end of the month to appeal and many experts do not expect that to happen.

Meanwhile, attorneys general representing New York, California and Oregon filed a motion asking the court for permission to rehear the case in from of the full panel of judges -- known as an en banc review.

“AARP is not giving up on our fight to make sure that hard-earned retirement savings have strong protections from conflicts and hidden fees,” Nancy LeaMond, AARP’s chief advocacy and engagement officer said, according to Politico Pro. “The recent court decision allows some financial advisors to provide guidance based on what’s best for their pocketbooks, not the consumers.”

The Fifth Circuit's 2-1 decision came down March 15, reversing several losses by industry opponents in courts from Kansas to Washington, D.C..

Judge Edith H. Jones wrote in the majority opinion that the DOL rule "fails the reasonableness test" of the Administrative Procedures Act by extending the department's ERISA authority to one-time IRA rollovers and similar transactions.

The decision went on to admonish the DOL for exceeding its authority and re-affirmed the role of Congress and the Securities and Exchange Commission in regulating agents and advisors.

The DOL rule was created by the Obama administration, but President Donald J. Trump ordered the DOL to delay and further study the rule soon after taking office.

Parts of the rule went into effect June 9, but the more stringent exemptions needed to sell variable and fixed indexed annuities were delayed until July 2019.

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].

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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]. Follow him on Twitter @INNJohnH.