Secretary of Labor Alexander Acosta is now on record saying he won’t delay implementation of the fiduciary regulation.
He chose a very public means of doing so: an op-ed in The Wall Street Journal (subscription required) in which he states that “the Labor Department has concluded that it is necessary to seek additional public input on the entire Fiduciary Rule, and we will do so.” He goes on to “recognize that the rule goes into partial effect on June 9, with full implementation on Jan. 1, 2018,” and that while some have called for a complete delay of the rule, “We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input.”
Citing two core principles — respect for the individual and respect for the rule of law — Acosta explains that “Respect for the rule of law leads us to the conclusion that this date cannot be postponed. Trust in Americans’ ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule.”
That said, and while acknowledging that that “…courts have upheld this rule as consistent with Congress’s delegated authority,” he goes on to state that “the Fiduciary Rule as written may not align with President Trump’s deregulatory goals. This administration presumes that Americans can be trusted to decide for themselves what is best for them.”
Going on to acknowledge the frustration of those who “call for immediate action on the Obama administration’s regulations” with the “slow process of public notice and comment,” Acosta replied: “But this process is not red tape. It is what ensures that agency heads do not act on whims, but rather only after considering the views of all Americans. Admittedly, this means deregulation must find its way through the thicket of law. Casting aside the thicket, however, would leave Americans vulnerable to regulatory whim.”
He also noted that while under the previous administration, “the Securities and Exchange Commission declined to move forward in rule-making” despite its “critical expertise in this area,” he hopes that in this administration the SEC will be a “full participant.”
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Acosta closed by noting that the Labor Department will roll back regulations that harm American workers and families, but that “We will do so while respecting the principles and institutions that make America strong.”
NAPA Net had just reported that Acosta recently expressed his intention to freeze the rule in a way that would “stick” in a conversation with Sen. Tim Scott (R-SC). That report triggered a written response to Acosta from Sens. Patty Murray (D-WA), Elizabeth Warren (D-MA) and Corey Booker (D-NJ) encouraging him to wait for the outcome of the Labor Department’s analysis of the rule.
Also, late on May 22 the Employee Benefit Security Administration (EBSA) announced in Field Assistance Bulletin No. 2017-02 that during the phased implementation period ending on Jan. 1, 2018, the Labor Department “will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.” The FAB also noted that, “to the extent that circumstances surrounding the applicability date of the fiduciary duty rule and exemptions give rise to the need for other temporary relief, EBSA will consider taking such additional steps as necessary.”
“NAPA recognizes that many in the industry are going to be concerned about where we go from here,” commented American Retirement Association CEO and NAPA Executive Director Brian Graff. “Rest assured, NAPA’s Government Affairs Committee has already been providing input to DOL staff on ways to improve and streamline the rule, and will continue to do so.”