Sen. Elizabeth Warren urged Acting Labor Secretary Edward Hugler on Tuesday not to delay the April 10 implementation date of Labor’s fiduciary rule as it would be “a slap in the face” to financial services companies that have already invested in compliance.
In her Tuesday letter, Warren, D-Mass., a member of the Senate Banking Committee, told Hugler that 21 firms – including BlackRock, TIAA and LPL Financial – sounded a clear message: “This rule is good for workers saving for retirement and companies are prepared to meet the compliance deadline.”
The firms were responding to Warren’s Jan. 19 request asking 33 firms whether they support delaying and rolling back Labor’s fiduciary rule.
“Last month, in the midst of uncertainty regarding whether the Trump administration would take actions to delay or roll back this rule, I wrote to over 30 leading finance companies regarding their commitment to helping workers save for retirement, their support for the DOL fiduciary rule, and their preparedness to comply with the rule in April,” Warren told Hugler in her Tuesday letter.
Firms including Vanguard, TIAA and Transamerica “expressed their support for the rule, and BlackRock emphasized that: ‘We need immediate action, as the longer we wait the deeper and more difficult’ the retirement crisis ‘problem becomes,’” Warren wrote.
Charles Schwab, Capital One and Lincoln Financial told Warren that they have “spent time and resources investing in compliance with the new rule and fully expect to be ready to serve their customers under the rule’s higher standard” by April 10.
Added Warren: The “overwhelming voice of financial firms is clear: They support the goals of this rule; they have invested in this rule; they have planned for this rule; and they will be ready by the April deadline.”
President Donald Trump signed an executive order Friday afternoon directing the Labor Department to undertake an assessment of its fiduciary rule, and if it deems appropriate, to revise the rulemaking, which industry officials say would delay the rule’s April 10 effective date.
Hugler said in a statement the same day that Labor would “consider its legal options to delay the applicability of the date as we comply with the president’s memorandum.”
The draft order to Labor included a directive to halt the rule’s implementation by 180 days, but that provision was left out of the final order. At least one attorney has said that Labor plans to file a notice in the Federal Register as early as Tuesday that will delay the rule most likely by 180 days.
The order had not been filed as of Tuesday morning.
Also looming this week is a promise by Judge Barbara M.G. Lynn, the judge presiding over the Texas case against Labor’s fiduciary rule, to issue a ruling by Friday.
Nine plaintiffs, including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute, sued the DOL over its fiduciary rule in a Texas court.
Thomas Clark, of counsel with The Wagner Law Group, said that the best option to delay the rule is for the department to “hide behind the decision of the court if the plaintiffs get a favorable decision.” The second best option: “the DOL interim Secretary follows the president’s order and has the 180 days cooling off review period.”
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