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Plaintiffs Press for Fiduciary Rule ‘Closure’

The victorious plaintiffs in litigation vacating the Labor Department’s fiduciary rule would like the U.S. Court of Appeals for the 5th Circuit to put the rule – and the financial services industry at large – out of its collective “misery.”

In a letter to the Clerk of Court for the U.S. Court of Appeals for the 5th Circuit, counsel for the plaintiffs (ACLI/NAIFA, and on behalf of the U.S. Chamber) noted that that court’s ruling “vacating the Fiduciary Rule issued on March 15, 2018” contained a docket entry noting: “Mandate issue date is 05/07/2018.” However, despite, as the letter points out, “the Department’s time to seek rehearing en banc has long passed,” that mandate “has not been issued.”

As a result, and “notwithstanding this Court’s holding that the Fiduciary Rule violates the Administrative Procedure Act, without the issuance of a mandate, the Rule remains in effect – but subject to the Department’s ‘temporary enforcement policy’ (and attached a copy to the letter as an Exhibit) as well as the condition that it will be vacated in whole when the mandate issues,” the letter continues.

All of this – in what may well be the understatement of the year – creates “palpable uncertainty for significant portions of the insurance and financial services industries,” the letter continues, resulting in “uncertainty that interferes with long-term planning, that risks generating consumer confusion, and that imposes ongoing compliance costs on regulated entities.”

And closed by requesting (respectfully) “that this Court issue the appellate mandate as expeditiously as possible, consistent with the Court’s internal processes.”

Stay tuned.