The Department of Labor got the green light from the White House’s Office of Management and Budget to finalize a proposal delaying implementation of its fiduciary rule.
The OMB said on its website Tuesday that it had completed its review of the proposal and that the proposal is economically significant but provided no details. When DOL officials sent the proposal to OMB, it was classified as not economically significant. The change in status could require further economic analysis from the DOL before a final rule is proposed.
The next step in rule-making is a comment period that could be as short as 15 days, followed by finalization of the proposal, which OMB has to approve before it is issued.
The action follows President Donald Trump’s Feb. 3 executive memorandum directing the secretary of labor to consider delaying or replacing the fiduciary rule that is scheduled to take effect April 10. A draft version of Mr. Trump’s memorandum, which did not include a specific timeline, called for a 180-day delay. The order called on DOL officials to conduct a new economic and legal analysis. It is unclear whether that analysis was completed as part of the OMB review submission.
Kent Mason, a lawyer with Davis & Harman who represents several major financial institutions, said the OMB clearance “is an important step toward delaying a rule that would cause small accounts to lose access to investment advice, according to the only independent study conducted after the publication of the final fiduciary rule. We applaud this step and look forward to the presidentially ordered review of the rule, which can happen while the rule is delayed.”