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Life Health > Life Insurance

Official DOL fiduciary rule delay expected shortly

By Melanie Waddell

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The Office of Management and Budget scheduled a meeting Tuesday with the AARP to discuss the delay of the Department of Labor’s fiduciary rule implementation.

Speculation is that Labor could file this week, after OMB approval, the much-anticipated 180-day delay of the rule’s April 10 compliance date, which will appear in the Federal Register.

Related: Details emerge on Trump’s fiduciary rule directive

Meanwhile, Sen. Lamar Alexander of Tennessee, chairman of the Senate Health, Education, Labor and Pensions Committee, said Tuesday that the nomination of R. Alexander Acosta, law dean at the public Florida International University, as President Donald Trump’s new Labor secretary “is off to a good start because he’s already been confirmed by the Senate three times.”

It’s been only two weeks since Labor filed with OMB to delay the fiduciary rule’s compliance date via a Notice of Proposed Rulemaking.

Lawyer Steve Saxon says R. Alexander Acosta is a “safe” pick, but it “doesn’t look like he knows a lot…

Because the proposed rulemaking is “marked as not economically significant may account for why OMB could review it quickly,” Kristina Zanotti, a partner at K&L Gates in Washington, said in a Tuesday interview with ThinkAdvisor. Any notice would simply likely be a delay of the rule’s compliance date, she added.

“Word is OMB could approve this week, but the proposed regulation won’t be published till next week,” said another attorney.

See also: Finance, insurance groups react to Trump’s executive orders

Once OMB releases DOL’s proposal to the public in the Federal Register, “we will know the length of the delay of the rule’s applicability date and whether stakeholders will have an opportunity to provide comments before or after the delay is effective,” Zanotti along with her colleagues wrote in a recent client alert.

The question remains as to whether Labor’s proposal at OMB is a proposed rule or an interim final rule.

OMB also just recently got a new director, Rep. Mick Mulvaney, R-S.C., seen here. (Photo: AP Images)OMB also just recently got a new director, Rep. Mick Mulvaney, R-S.C., seen here. (Photo: AP Images)

A proposed rule allows for a “public comment period and the comments are then reviewed and taken into account before the rule is finalized. This is the normal process applied in most cases,” notes Joshua Waldbeser, of counsel with Drinker Biddle & Reath. “An interim final rule is effective immediately, and public comments are then permitted after the fact. Interim final rules are usually issued where there is ‘good cause’ to issue a rule without first running it through the public comment process, which the Administrative Procedure Act requires as a general matter.”

Waldbeser adds that he’s “hoping that the delay becomes effective as soon as possible in advance of April 10. If it’s published at OMB this week, that would be very helpful. If the delay isn’t published at OMB within a couple of weeks, the timing is going to be uncomfortably tight.”

As directed by President Donald Trump, Labor is to prepare an updated economic and legal analysis concerning the fiduciary rule’s likely impact. 

K&L Gates attorneys opine that DOL “will seek to complete this analysis as quickly as possible to allow the DOL sufficient time to further propose rescinding or revising the rule, if the DOL deems such action is warranted.”

Any such proposal, the attorneys say, “will be subject to additional public comment. We anticipate many comments ‘for’ and ‘against’ the rule with the ultimate outcome uncertain.”

Alexander noted that Acosta “has an impressive work and academic background,” and that the HELP Committee “will schedule a hearing promptly after his nomination papers arrive in the Senate.”

He added: “I look forward to exploring his views on how American workers can best adjust to the rapidly changing workplace.”

A spokesperson for Alexander noted Tuesday that the HELP Committee “will not officially notice a confirmation hearing for Mr. Acosta until the committee has received his HELP committee paperwork and Office of Government Ethics agreement.”

See also:

Compliance expert answers 7 looming fiduciary rule questions

4 DOL fiduciary rule compliance considerations

A DOL fiduciary rule compliance checklist

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