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Courts

AARP, states lose bid to revisit decision to stop fiduciary rule

AARP and attorneys general of New York, California and Oregon lost a bid on Wednesday to intervene in the 5th U.S. Circuit Court of Appeals case challenging the Department of Labor's fiduciary rule.

The decision to deny a motion to intervene, which precludes the possibility of the full circuit panel of judges rehearing the case, was made by the same three judges in New Orleans who on March 15 ruled that the DOL had overstepped its legal authority to issue the new fiduciary standard for non-discretionary fiduciaries like record keepers and advisers.

It is now set to become ineffective May 7, unless the Department of Justice on behalf of the DOL appeals to the Supreme Court by June 13. That is considered unlikely since DOL officials declined to challenge the appeals court decision in the case brought by the U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute and Securities Industry and Financial Markets Association. Those groups argued in court motions to deny the requests to intervene that the motions by AARP and the attorneys' general "do not come close to justifying their unprecedented bid to intervene for purposes of filing a motion for rehearing en banc, itself an exceptional motion."

Further changes to the fiduciary rule could come once the DOL completes an internal regulatory review.