A Texas judge asked plaintiffs today to explain why an emergency injunction is needed given the Department of Labor's willingness to defer enforcement.
Judge Barbara M.G. Lynn of the Northern District of Texas gave plaintiffs, which include the U.S. Chamber of Commerce and the Insured Retirement Institute, until Thursday to file briefs.
Plaintiffs asked for the emergency injunction Friday to delay the April 10 "applicability date" of the DOL fiduciary rule. That same day, the DOL released a bulletin alerting the financial services industry that it will not pursue enforcement of the rule in the short term.
The Texas plaintiffs asked Lynn to rule by March 20. Their challenge is daunting, given that Lynn ruled against every point in their original claim. Federal judges in Kansas and Washington, D.C. have also sided with the DOL.
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 Donald J. Trump ordered the DOL to delay the rule in a Feb. 3 memorandum. That 60-day delay could be published in the Federal Register later this month. In the meantime, the DOL re-assured the industry with its bulletin.
“Financial services institutions have expressed concern about investor confusion and other marketplace disruption based on uncertainty about whether a final rule implementing any delay will be published before April 10, whether there may be a ‘gap’ period during which the fiduciary duty rule becomes applicable before a delay is published after April 10,” the bulletin reads.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
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