The Department of Labor’s fiduciary rule could be delayed “within days” of the new administration through action taken by Labor, instructions from the White House, or pending court cases, David Hirschmann, president and CEO of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, said Wednesday. “There’s no one mechanism to achieve delay” in the rule’s implementation.
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Speaking to reporters at the Chamber’s 2017 State of American Business Address in Washington, Hirschmann said the rule could be halted before legislation is passed.
Rep. Joe Wilson, R-S.C., a member of the House Committee on Education and the Workforce, introduced on Jan. 6 a bill to delay the rule’s implementation by two years.
“It’s helpful to have Congress weighing in on the delay, but we need action before a bill could be signed into law,” Hirschmann said in separate comments.
Earlier GOP calls to fire Richard Cordray were met with warnings about the potential for a costly lawsuit.
The April 10 compliance deadline, he added in comments to reporters, “was not going to work one way or the other. We would be pressing equally hard on a Clinton administration to delay because it just doesn’t work. It was a deadline driven by political motives rather than practical realities.”
The first step a new administration would take to change a rule “is to delay it,” he added. “That’s what we’re looking for this administration to do in a very timely fashion because April is right around the corner.”
After delay, the next move is “to figure out what to do to fix the rule, and that’s going to take a combination of DOL … coming up with a different approach and perhaps the [Securities and Exchange Commission] looking at it.”
The rule’s best interest contract exemption is still problematic because “the primary enforcement mechanism” for the BICE is the class-action trial bar, Hirschmann argued.
Indeed, Thomas Donohue, Chamber’s president and CEO, said at the event that President-elect Trump could “eliminate the rule immediately” through an executive order.
On Jan. 20, “President Trump can begin to eliminate the regulatory burden imposed by executive orders. We urge him to act immediately and continually,” Donohue said. “Congress can also move quickly on some of the recently imposed regulations by using the Congressional Review Act.”
Some of the most “egregious regulations are already being challenged in the courts,” Donohue said. “Our law firm helped put them there. You can count on the Chamber’s Litigation Center to be very busy this year.”
Much of the “explosive regulatory growth we have seen can be traced to two mammoth laws that the Chamber originally opposed and predicted would not work — Obamacare and Dodd-Frank,” he added.
As to the fiduciary rule, Hirschmann conceded, however, that Chamber has yet to hear directly from the incoming Trump administration regarding action to stop it. “I don’t know a decision has been made, but I’m confident there are enough folks explaining the consequences; I think a delay would have been inevitable regardless.”
The nomination hearing for Andrew Puzder, the fast-food executive and attorney who is Trump’s choice to be the next Labor secretary, will likely be moved from the tentative Jan. 17 date to sometime in February, according to Politico.
Parallel action in halting the fiduciary rule could come from the pending legal cases against it.
Judge Barbara M.G. Lynn heard oral arguments on Nov. 17 in the case against DOL’s rule filed by nine plaintiffs in the U.S. District Court for the Northern District of Texas. She has yet to render a decision in the case, which was filed by the Chamber, along with other plaintiffs including the Securities Industry and Financial Markets Association and the Financial Services Institute. Hirschmann said Wednesday that Lynn’s decision would likely come in the next 60 days.
Two federal courts have recently blocked attempts by the insurance industry to halt Labor’s fiduciary 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 its 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 that NAFA “should receive a briefing schedule” later in January from the court, “which 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 said 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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