Coalition Urges Trump Not to Dump DOL’s Fiduciary Rule
November 23, 2016 by ThinkAdvisor
Fiduciary advocates are urging the incoming Trump administration to spare the Labor Department’s fiduciary rule, as government lawyers press a Washington judge not to put on hold his recent ruling that upheld the merits of the regulations.
As speculation intensifies that the fiduciary rule could be on the chopping block or significantly curtailed under President Donald Trump and a GOP-controlled Congress, members of the SaveOurRetirement Steering Group—AFL-CIO, AFSCME, Americans for Financial Reform, Better Markets, Consumer Federation of America and the Pension Rights Center—issued a statement telling Trump to “make good on his election talk by supporting the rule—and choosing regular Americans over Wall Street.”
Trump, the coalition said, “campaigned on the promise to make government work for hard-working Americans, not special interests. One key test of his commitment will be what position he takes” on the Labor Department’s fiduciary rule. The rule, years in the making, seeks to mitigate conflicts of interest in the retirement advice market.
“The election outcome did not change the fact that Americans deserve and need retirement investment advice that is in their best interest—not advice that is compromised by their advisor’s conflict of interest,” the coalition statement said.
Meanwhile, the Labor Department on Monday urged U.S. District Judge Randolph Moss in Washington not to stay his ruling pending appeal by the National Association for Fixed Annuities, or NAFA.
Moss on Nov. 4, in a 92-page ruling, denied the annuities association’s request for a preliminary injunction to block the rule. He simultaneously ruled in favor of the Labor Department on the merits of the rule.
NAFA said on Nov. 7 it would appeal Moss’ decision. The group asked the judge to put his ruling on hold while the case is pending in the U.S. Court of Appeals for the D.C. Circuit.
“NAFA’s proposed injunction could potentially save the annuity industry from further compliance costs, but this is meaningful only if the rulemaking is ultimately struck down,” Justice Department lawyers wrote in their court filing on Monday.
“To make it plausible for the industry to cease preparations now, NAFA asks that the court to guarantee a lengthy compliance period if, as is likely, NAFA loses on appeal. This comfort for the industry would come at great expense to the investors who will continue to be harmed in the interim.”
The case in Washington challenging the fiduciary rule is one of several pending actions in federal courts around the country.
Lawyers who attended oral arguments last week in Texas federal district court—the U.S. Chamber of Commerce is a lead plaintiff there—offered differing views on how the presiding judge, Barbara M.G. Lynn, might rule.
U.S. District Judge Daniel Crabtree in the District of Kansas presided over the second hearing against the fiduciary rule, which took place on Sept. 23. He has yet to render a decision.
Thrivent Financial for Lutherans became the sixth plaintiff to bring a complaint against the rule. The insurer filed a suit in late September in U.S. District Court for the District of Minnesota, challenging the class-action waiver requirement under the rule’s best interest contract exemption, or BICE. Oral arguments have yet to be scheduled.
