Lawsuit bid to overturn DOL Fiduciary Rule
June 2, 2016 by Jamie Johnson
The U.S. Chamber of Commerce led nine groups in an lawsuit bid to stop the Department of Labor (DOL) Fiduciary Rule on Wednesday June, 1st. John Hilton of InsuranceNewsNet reports in “Lawsuit Filed to Overturn DOL Fiduciary Rule” that the lawsuit asked for the court to immediate vacate and set aside the rule.
“The Rule and PTEs overstep the Department’s authority, create unwarranted burdens and liabilities, undermine the interests of retirement savers, and are contrary to law,” Hilton says the complaint reads. The Plantiffs argue that the DOL lacks the authority to publish the rule.
Their legal team includes Eugene Scalia, who comments “To be sure, the Department has authority to interpret the definition of ‘fiduciary’ under ERISA and the Internal Revenue Code,” wrote Scalia, a partner with Gibson Dunn. “Its enforcement authority, however, is limited to ERISA.” He also wrote in his comment letter that the DOL’s lawful role is to create rules that regulators enforce and they cannot create rules that form the basis of a private right of action; only Congress can do that.
Hilton adds in a portion of the co-plantiffs’ statement:
“Instead of helping savers plan for retirement, the new rule will unfortunately restrict their access to affordable retirement advice and limit their options for saving. The rule will shackle Main Street financial advisors with extensive new requirements and constant liability, forcing them to limit the options and guidance they provide to retirement savers.
Our organizations are now asking a court to review whether the Department of Labor overstepped its boundaries, creating a rule that will leave Americans with fewer retirement choices, higher costs and reduced access to professional financial advice. Further the ‘private right of action’ mechanism creates significant new legal risk for financial advisors, who will face the threat of class action lawyers challenging their every move.
This lawsuit is necessary to prevent the Labor Department from exceeding the authority that was assigned to it by Congress. More importantly, it will protect retirement savers and our member firms, who are committed to their financial futures.”
Please click HERE to read the full article and ongoing updates. John Hilton and InsuranceNewsNet will be breaking down the entire 74-page complaint and getting expert opinion.
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