Rep. Joe Wilson, a member of the House Committee on Education and the Workforce, introduced a bill Friday to delay the implementation of the Department of Labor’s fiduciary rule by two years.
Labor’s “fiduciary rule is one of the most costly, burdensome regulations to come from the Obama administration,” Wilson, R-S.C., said in a statement introducing the bill. “Rather than making retirement advice and financial stability more accessible for American families, they have disrupted the client-fiduciary relationship, increased costs and limited access.”
The rule’s first compliance date is April 10. Wilson said that delaying the implementation of this “job-destroying rule” would give “Congress and President-elect Donald Trump adequate time to re-evaluate this harmful regulation.”
Industry groups were quick to throw their support behind the bill.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said in reaction to the bill that “as our members have worked diligently to prepare for implementation, at great cost and with consequential impacts on retirement savers, a delay in applicability would be prudent to allow the new Congress and administration to review a better course to protect investors.”
SIFMA, he added, continues “to believe the rule is harmful to the market and most importantly investors.”
Cathy Weatherford, president and CEO of the Insured Retirement Institute, said that IRI thanks “Wilson for his leadership on this important issue. We have long-standing concerns about the rule and its harmful impact on retirement savers. A delay is much needed and will provide more time to policymakers to reevaluate it and protect consumers from its negative consequences.”
However, Barbara Roper, director of investor protection at the Consumer Federation of America and a staunch fiduciary rule supporter, said on Friday that “I suppose it is kind of refreshing that Rep. Wilson didn’t even pretend to seek input from anyone but the financial lobbyists in crafting a bill to ‘protect American families’ financial advice.’ If he had, he’d know that the public, including a strong majority of Trump voters, want the rule to move forward.”
Rep. Wilson’s “intent is not simply to delay implementation but to provide the time needed to kill the rule or water it down to the point of meaninglessness,” Roper added. “It is essential that congressional Democrats recognize the real intent here and oppose this measure as strenuously as they would oppose a bill to repeal the rule.”
SIFMA is among the nine plaintiffs who filed a suit in Texas against DOL’s fiduciary rule. Judge Barbara M.G. Lynn heard oral arguments on Nov. 17 in that case in the U.S. District Court for the Northern District of Texas. She has yet to render a decision in the case. Other plaintiffs include the U.S. Chamber of Commerce and the Financial Services Institute. Two federal courts have recently blocked attempts by the insurance industry to halt the rule. The U.S. Court of Appeals for the D.C. Circuit last month refused a request from the National Association for Fixed Annuities to block the rule from taking effect in April. But NAFA is moving forward on an appeal in the D.C. Circuit.
NAFA Executive Director Chip Anderson told NAFA members in a recent email that the annuity group “disagrees and is deeply disappointed” in the D.C. Circuit’s order denying NAFA’s request for an injunction pending appeal. “The court gave no real rationale for its decision. We are exploring all opportunities for further judicial review and look forward to a full briefing on the merits.”
Pamela Heinrich, NAFA’s general counsel, said Friday that NAFA is expected to receive a briefing schedule this month that “will give us a better timing of the appeals process.”
She added, however, that NAFA “continues to consider all of its options with respect to its litigation. No options are off the table at this point.”
Anderson added that NAFA remains “very hopeful the new administration will repeal this anti-consumer regulation, and we continue to work with our contacts on [Capitol] Hill to effect that outcome.”
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