Plaintiffs who won a big appeals court victory to stop the controversial Department of Labor fiduciary rule are wondering when the final court mandate officially killing the rule will be filed.
In a letter to the Fifth Circuit Court of Appeals filed today, David W. Ogden, attorney for ACLI, reminded the court that his clients have been waiting for the mandate for about a month. In the meantime, he noted, the DOL rule officially remains in effect.
The Fifth Circuit ruled against the DOL on March 15. Since then, appeals were filed and denied, then denied again. All that remains is the final mandate, a filing that is considered a routine document. Yet, the industry waits.
Ogden described a "palpable uncertainty for significant portions of the insurance and financial services industries -- uncertainty that interferes with long-term planning, that risks generating consumer confusion, and that imposes ongoing compliance costs on regulated entities."
There are rumors that the judges are considering internally whether to undertake an en banc review, which opens up the 2-1 decision to review by the entire bench. However, en banc reviews requested by AARP and a trio of states were rejected twice by the Fifth Circuit.
The DOL released a temporary enforcement bulletin May 7, Ogden's letter noted, that indicated a continued policy of non-enforcement as long as investment advisors are making a good faith effort to comply. But the DOL also said it expected a mandate very soon, added Ogden, of the Washington law firm WilmerHale.
Since then, another month has gone by. Ogden's letter requested the mandate be issued "as expeditiously as possible."
Fifth Circuit 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 government has until June 13 to ask the Supreme Court of the United States to take the case, which seems highly unlikely given the Trump administration's opposition to the regulation.
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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