The Department of Labor is officially seeking to delay the fiduciary rule’s implementation, according to paperwork filed with the Office of Management and Budget on Thursday.
The delay proposal process would not start until OMB responds to the request, which is expected to take several weeks or more. The next step would be a 15-day comment period before a delay proposal is finalized, according to several sources.
On Feb. 3, President Donald Trump issued an executive memorandum directing the secretary of labor to consider delaying or replacing the fiduciary rule that is scheduled to go into effect in April. A draft version of that memorandum called for a 180-day delay.
In the final version, which did not include a specific timeline, Mr. Trump directed the secretary of labor to determine whether the rule would adversely affect access to retirement information and financial advice, and to conduct a new economic and legal analysis of the rule's “likely impact.” A negative impact or inconsistency with administrative policy would require the DOL to publish a proposed rule rescinding or revising it.
On Feb. 8, a U.S. District judge in Dallas denied the government’s motion to stay a legal challenge to the rule while the DOL reviews it, and dismissed a lawsuit filed by the U.S. Chamber of Commerce, Securities Industry and Financial Markets Association and other financial groups challenging the DOL's authority to issue the rule.
Kenneth E. Bentsen Jr., SIFMA president and CEO, applauded Mr. Trump’s action, saying in a statement that “DOL is not the right agency nor is the DOL rule the right approach. Delaying the applicability date to allow the new administration an opportunity to review the rule’s impact on investors and the market is appropriate and not without precedent.”
The Department of Labor’s proposed delay “is an attempt to kill the rule; it’s not a delay,” said Kathleen M. McBride, a founder of the Committee for the Fiduciary Standard, in an interview. ”It’s really sad.”
