Pressure continues to mount on the Department of Labor to weaken or dismantle the Obama administration-authored fiduciary rule.
The confirmation of Labor Secretary Alexander Acosta Friday led to a missive from GOP legislators urging him to make reforming the rule a priority. Delivered Tuesday, the letter was signed by 124 lawmakers.
The letter repeated industry concerns that small savers will be left behind if the fiduciary rule is fully adopted. In 2015, the Government Accountability Office found that 29 percent of Americans ages 55 and older had no money saved for retirement and no pension, the letter stated.
“One of the primary concerns that our oversight exposed is that financial advisors would be forced to move from commission-based accounts to fee-based advisory accounts, and that advisors would be unlikely to afford to continue providing advice to small, fee-based accounts,” the letter reads.
Acosta gave cagey responses when queried by Senate Democrats on the fiduciary rule during his March confirmation hearing.
Sen. Elizabeth Warren, D-Mass., pointedly asked whether Acosta would defy President Donald J. Trump’s Feb. 2 memorandum ordering the DOL to delay the fiduciary rule.
“There is an executive action that directs how the secretary will approach this rule,” a noncommittal Acosta replied.
A visibly frustrated Warren actually interrupted Acosta’s most expansive remarks on the fiduciary rule, which holds anyone working with retirement dollars to a higher legal standard.
“The rule goes far beyond simply addressing the standards of conduct,” Acosta said before the interruption.
The 60-delay was later published and pushed the “applicability date” to June 9. Lawmakers say that isn’t enough, and urged Acosta to “act expeditiously to reverse this significantly flawed rule.”
The DOL accepted comments on both the delay and the rule itself for 15 and 45 days, respectively. The latter date concluded April 17, and the DOL has been posting comments in batches since then.
The 1,450 comment letters include contributions from companies and trade associations on both sides of the issue. In addition, 30 petitions were received by the DOL, including one by Americans for Prosperity.
“This regulation was written using inadequately justified assumptions and hands too much power to government bureaucrats without having fully considered whether federal action was necessary or if less destructive alternatives existed,” reads the petition that claims 456 signers.
Started by billionaire businessmen and brothers Charles and David Koch, Americans for Prosperity has become a major power broker in Republican circles.
Many analysts predict the DOL will pursue another delay and use the time to weaken some of the tougher exemptions within the rule. Eliminating the rule altogether will be much tougher, as courts have a tough burden of proof to reverse rules already on the books.
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].