Disagreement over the DOL fiduciary reproposal is heating up.

Top executives at the U.S. Chamber of Commerce have shared their concerns about the DOL’s upcoming rerelease of its fiduciary rule with Labor Secretary Thomas Perez and National Economic Council Director Jeffrey Zients.

In a letter late Thursday, two Chamber leaders highlighted concerns with the DOL’s reliance on prohibited transaction exemptions to “mold” the definition of fiduciary under the Employee Retirement Income Security Act, as well as the DOL’s attempts to regulate rollovers.

David Hirschmann, president of the Chamber’s Center for Capital Markets Employee Benefits Competiveness, and Randel Johnson, senior vice president of Labor Immigration and Benefits, say they “are troubled by the possibility of a rule with an overly broad application and significant reliance upon administrative prohibited transaction exemptions,” or PTEs, to shape a revamped fiduciary definition, according to the letter.

Under this approach, they continue, “everything is prohibited unless DOL specifically allows it. Almost by definition, this will create a rigid one-size-fits-all regulatory approach that will make it harder to serve current investors, particularly in smaller accounts.”

The two Chamber execs also say that DOL’s efforts to use administrative PTEs “to ‘shape’ the definition of a fiduciary will unnecessarily complicate, and increase costs attendant to, the provision of much-needed services to plans and their participants, as well as to IRA beneficiaries.”

Investors as well as regulated service providers — and DOL — would benefit if DOL were to first “issue an advanced notice of proposed rulemaking, including possible PTEs, before it proposes a rule,” the two write.

Historically, DOL has used administrative PTEs to address “very fact specific transactions with respect to which relief is often conditioned on accommodating a one-size-fits-all approach and/or business model to permissibly enter into the defined transaction,” the two Chamber execs point out, adding that DOL will likely have to devote “significant resources to this process as PTEs often take several rounds of drafting to ensure that they are workable.”

What’s more, the two argue, even if the exemptions “effectively address concerns today, the market for financial products and services is continually evolving,” and such exemptive relief “that is sufficient today may well become obsolete constraining innovation in the marketplace.”

The two Chamber execs also point out that retirement savers already are protected by “robust” rules issued by the Securities and Exchange Commission and Financial Industry Regulatory Authority, and that DOL’s efforts to put individual retirement accounts and rollovers under fiduciary advice would duplicate SEC and FINRA rules.

They note the SEC and FINRA have both made protecting retirement savings one of their examination priorities for 2015.

“The Chamber believes that regulation of our financial markets is most effective when it both enables ample well-disclosed choices for investors and ensures adequate investor protections,” the two execs explain. “This is particularly true of retirement savings. We strongly believe no approach by DOL will successfully achieve both of these goals unless it is considered in the context of the broader regulatory and enforcement regimes impacting these services.”

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