Democrats Ask For More Comment Time On Fiduciary Proposal

WASHINGTON – Twenty-six members of Congress have asked the Department of Labor to extend by an additional 45 days the comment period on its proposal to impose a fiduciary standard of care on the sale of investment products.

Sen. John Tester, D-Mont., took the lead on the request with seven co-signers, and Rep. Frederica S. Wilson, D-Fla., led on behalf of 16 co-signers.

The letter followed a request by 16 trade associations representing the financial services industry for a similar extension. The extension would increase the comment period to three months, or 120 workdays. Currently, the proposal has a 75-day comment period that ends July 6.

The letter signed by the 17 House Democrats said the additional 45 days will “allow for thoughtful and constructive feedback so that the DOL may put forth the best possible final rule and protect investors.”

After the first letter from the industry groups, Labor Secretary Thomas E. Perez said that the original 75-day comment period should be adequate because it will be followed by a public hearing and then an additional comment on a revised rule.

Barbara N. Roper, director of investor protection for the Consumer Federation of America, said the delay requests “are part of a transparent effort on the part of industry to kill the rule by running out the clock,” i.e., the end of the Obama administration.

Roper said a 75-day comment period, followed by a public hearing with an additional opportunity to comment afterwards “is not only adequate, it is generous.”

“If we can manage a careful and thorough review in that time with our limited resources, surely the financial firms and their trade associations can marshal their army of attorneys to get the job done,” Roper said.

She went on to add, “If financial firms would spend half the time and resources on analyzing the rule that they’ve spent on trying to kill it, they could have their comment letters done in plenty of time to enjoy a relaxing July 4th weekend.”

The letter signed by Wilson and her 16 fellow Democrats notes that the new fiduciary proposal “differs greatly” from a 2010 proposal, and, “will have a large impact on retirement investors and the financial services industry.”

The letter said that, “It is vital that our constituents, Congress, and all other interested parties have the opportunity to fully understand all of these changes prior to providing the DOL with feedback regarding the proposal.”

Tester, on behalf of himself and eight other Democratic senators, asked for the extension because, “It is critically important that those representing different interests across the retirement spectrum have an ample amount of time to submit comments to the DOL on this proposed rule.”

The industry letter was signed by an official of the Financial Services Roundtable. Other signees included the American Council of Life Insurers, American Retirement Association, Association for Advanced Life Underwriting, the Financial Services Institute, Insured Retirement Institute, National Association for Fixed Income Annuities and the National Association of Insurance and Financial Advisors. The U.S. Chamber of Commerce also signed the letter.

InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].

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InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].