Claiming that the 30-day comment period is “less than half of what similar proposals were granted in the past,” Democratic congressional leaders want more time to comment on the fiduciary rule.
The call came on July 3 from Sen. Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Rep. Bobby Scott (D-VA), chairman of the House Education and Labor Committee, in a letter to Secretary of Labor Eugene Scalia calling for the Department of Labor to extend the comment period for its recent proposal to replace an Obama-era retirement protection.
Last week the Labor Department unveiled a new fiduciary rule proposal titled “Improving Investment Advice for Workers & Retirees” that includes a new prohibited transaction class exemption that would be available for investment advice fiduciaries, along with notice of a 30-day comment period, which considering a July 7 publication date in the Federal Register means an Aug. 6 deadline for comments.
Leaving no doubt as to the tone of their intended comment, they note that Scalia “fought in court to strike down” the Obama-era version prior to his being named as Secretary of Labor, stating that the just-released version “would let financial advisors put their own interests ahead of their clients’.”
In a press release, they go on to note that, “Contrary to its name, the proposed rule does not require financial advisors to abide by a fiduciary standard when providing retirement investment advice. Unscrupulous advisors could still prioritize their financial interests and profit motives over that of their clients’ retirement interests.
“The DOL only provided 30 days to submit comments on the proposed rule, an insufficient time for the American public to review and respond to a complex, 123-page proposed rule. Specifically, the proposed rule requires familiarity with the U.S. Securities and Exchange Commission’s (SEC’s) 770-page ‘Regulation Best Interest: The Broker-Dealer Standard of Conduct,’ and significantly impacts the retirement savings landscape for advisers and retirement savers alike. The DOL owes it to the public to take the time to meaningfully engage with people about their concerns rather than rushing through a rule that would seriously damage the retirement security of people across the country. During the middle of a pandemic, when people across the country are grappling with severe economic and health challenges, it is as important as ever for the DOL not to arbitrarily and unfairly rush through this process.”
In the letter the members note that a previous fiduciary standard proposal[i] had a comment period over twice as long as what has been outlined in this case, and that the Department’s rule is not only over 120 pages, but requires an understanding of a 770-page SEC regulation.
They continue, “As the Obama Administration twice respected the requests of those who asked that the fiduciary rule comment periods be extended, we call on this Administration to do the same. At a minimum, we request the DOL provide an additional 60 days so as to give the public a more appropriate amount of time to consider the impact of such a significant proposal and better align this comment period with past precedents.”
[i]The letter goes on the explain that in 2010, the DOL issued a proposed fiduciary rule and initially provided a 90-day comment period. However, the DOL extended it for two additional weeks so as to give the public a total of 104 days to comment on the proposed fiduciary rule. At the time, the DOL noted that it would “ensure that all interested parties have the opportunity to prepare and submit comments.” When the DOL revised and reproposed its fiduciary rule in April 2015, it initially provided a 75-day comment period. In response, certain elected officials, business groups and others weighed in and requested an extension. Dozens of Senate Republicans wrote to the DOL, stating that 75 days was “not an appropriate amount of time.” The Senators asked the DOL to extend the comment period to 120 days “in order to afford consumers and stakeholders the best chance to thoroughly review the rule and provide informed opinions and comment.”
