DOL Rule Generates Flood of Comments, Petitions

The Department of Labor is expected to publish a 60-delay of its fiduciary rule in the Federal Register any day now.

That will push the looming April 10 “applicability date” to June 9. But many industry analysts say the DOL will use the extra time to undo many of the fiduciary rule measures, or implement another delay.

The impending delay was accompanied by a 15-day public comment period as required by the Administrative Procedures Act. The DOL reported 1,001 individual comments received during the period, which closed March 17.

These comments came from all corners – activists, consumers, advisors and agents, companies such as Northwestern Mutual, trade associations and even lawmakers – and appear split for and against the rule.

“I believe that as this bill now stands, it creates overlapping regulations and will certainly increase the potential for litigation,” wrote John Black, a California-based advisor, in a typical comment. “The 60-day review period granted may not be a sufficient amount of time to adequately complete the task at hand, as there is so much to consider.”

In addition, the final tally on petitions came in at 20. They range from the 96 people who signed a form letter supporting the delay, to the 119,094 signers to the CREDO Action letter opposing any delay.

“Any further delay and/or weakening of this rule is nothing more than a transparent gift to the financial services industry at the expense of everyday Americans,” read the letter by CREDO Action, a California-based progressive group.

Fifteen of the petitions argue for the delay and most of them urge further action to delay or scrap the Obama regulation. Ameriprise, Raymond James and the Financial Services Institute were among those sponsoring petition letters supporting the delay.

“There are aspects of the Department of Labor's rule in its current form that are overly complex and limit access to products and services that many investors want and may be appropriate and cost-effective for their needs,” read the Ameriprise letter.

By way of comparison, the DOL received 3,134 individual comments and 30 petitions on the fiduciary rule in 2015. Those comments were accepted from the time the tentative rule was published in April 2015 through Sept. 24 2015.

Of course, the most important comments came from the administration, which has since changed from Obama to Trump.

The fiduciary rule establishes a best interest standard of care for anyone working with retirement funds. It requires advisors and firms to make substantial disclosures or face class-action liability.

President Trump ordered the DOL to delay the rule in a Feb. 3 memorandum. In the meantime, the DOL released a bulletin alerting the financial services industry that it will not pursue enforcement of the rule in the short term.

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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