Rep. Joe Wilson, R-S.C., introduced a bill today that would delay the Department of Labor's fiduciary rule effective date by two years.
Wilson's Protecting American Families’ Retirement Advice Act calls the DOL rule “one of the most costly, burdensome regulations to come from the Obama Administration. Rather than making retirement advice and financial stability more accessible for American families, they have disrupted the client-fiduciary relationship, increased costs, and limited access."
The rule is slated to take effect April 10. Delay is one of the most immediate and simplest options available to Republicans while they work on long-range efforts to repeal the rule.
“This legislation will delay the implementation of this job-destroying rule, giving Congress and President-elect Donald Trump adequate time to re-evaluate this harmful regulation,” Wilson said.
Wilson’s legislation was immediately endorsed by the American Council of Life Insurers, the Financial Services Roundtable, the Insured Retirement Institute and the National Association of Insurance and Financial Advisors.
“NAIFA remains concerned that the final rule will reduce consumers’ access to honest, valuable, information and advice from financial professionals about retirement products," said NAIFA President Paul Dougherty. "A delay provides time for the new administration to conduct a thoughtful and appropriate review and to work with stakeholders toward public policies that help Americans achieve their financial and retirement security."
The DOL rule holds anyone working with retirement funds to a fiduciary standard. In order to receive commissions, advisors must commit to act in the “best interest” of clients and assume liability.
Trump ran on a vow to dismantle the Obama regulatory scheme, but so far, the focus has mainly been on the Dodd–Frank Wall Street Reform and Consumer Protection Act.
Trump has yet to say anything about the DOL fiduciary rule, which holds anyone working with retirement accounts to a “best interest” standard that includes legal liability.
Anthony Scaramucci, advising Trump on financial matters, has said the president-elect supports repeal.
Trump named fast food CEO Andrew Puzder as his secretary of labor nominee. Puzder is ardently anti-regulation, but also has not commented on the fiduciary rule.
Three Ways to Kill Rule
Otherwise, opponents have three ways to kill the rule:
• Legislation: House Republicans have Finance Committee-approved legislation ready to go, gutting both the fiduciary rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Democrats can still block legislation in the Senate by filibustering. Given how active Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., are on financial protection issues, the legislation route could be a tough one.
• Regulation: The new administration could adopt new rules that reverse the impending fiduciary rules. But to do so means following an arduous process of notification and public hearings and publication. And courts have ruled against similar efforts in the past.
• The courts: Opponents could wait and see if the courts strike down the fiduciary rule, which would enable the new administration to expend political capital elsewhere.
Four cases are ongoing in federal district courts in four different states. Judges have ruled in favor of the DOL in two court decisions handed down to date.
A third case brought by the U.S. Chamber of Commerce was heard Nov. 17 in Dallas, while a challenge by Thrivent Financial has a March 2 court date in St. Paul.
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].