As the Department of Labor at press time continued to grapple with whether to delay the effective date of its fiduciary rule (the consensus: a delay from the original April 10 date to June 9), industry players and lawmakers were busy telling Labor in comment letters why such a delay was warranted — or not.
Editor’s note: On March 29, DOL sent to the Office of Management and Budget its final rule requesting a 60-day delay to the implementation date of its fiduciary rule.
While the jury is still out on the fiduciary rule’s ultimate form, industry observers agree that there will be definite winners and losers — be they products, industry players or consumers — post Labor’s decision to either modify the fiduciary rule or eventually kill it.
R. Alexander Acosta, President Donald Trump’s Labor Secretary nominee, appeared before the Senate Health, Education, Labor and Pensions Committee, which oversees Labor, for his confirmation hearing on March 22.
Acosta said during the hearing that, if confirmed, he would follow Trump’s Feb. 3 directive to review the rule. “There is an executive action that directs how DOL will approach this [fiduciary] rule,” Acosta said in response to a question by Sen. Elizabeth Warren, D-Mass. Warren queried Acosta on whether, if confirmed before the 60-day request to delay the rule is finalized, he would “promise to stop” the delay.
Said Acosta: “I [...] support following executive actions from the president, who will be my boss.”
Warren probed further, asking Acosta, “Generally, do you support this [fidcuary] rule? Do you think this rule is a good idea?”
Acosta replied: “With respect, the rule goes far beyond simply addressing the standard of conduct [of] an investment advisor.”
Sen. Lamar Alexander, chairman of the HELP Committee, said in his opening remarks at Acosta’s hearing that the Obama administration issued “130% more final rules” than the previous administration’s Labor Department, citing the fiduciary rule, which he said “makes it more expensive for the average worker to access investment advice.”
Acosta noted during his testimony the executive order issued by Trump that “each Cabinet officer must review all rules and make determinations if they should be revised.” DOL “has been ordered to review all rules.”
During that review, “high on the list will be to protect workers with appropriate rules,” he said.
Acosta added: “We would enforce all rules that are in affect pending that review” of rules ordered by Trump.
When queried on his overall “big picture” view of regulation, Acosta replied that Trump “has ordered that we eliminate regulations that are not serving a meaningful purpose,” adding that “we need to free up small business” in order to create jobs.
Acosta was introduced during the hearing by fellow Cuban-Americans, Sens. Marco Rubio, R-Fla., and Ted Cruz, R-Texas. Rubio called Acosta a “brilliant, brilliant legal mind with a deep knowledge of labor issues.”
Cruz, who attended law school with Acosta and has known him for 25 years, cited Acosta’s academic accomplishments but noted that he’s also “a man of character, who takes very serious fidelity to the law and to the Constitution and has a passion for justice.”
A speedy confirmation process was anticipated, as an executive session was to be scheduled for committee members to vote on Acosta’s nomination a week after his confirmation hearing.
Editor’s Note: The Senate Health, Education, Labor and Pensions Committee voted 12-11 on Thursday to support Acosta’s nomination to be the next secretary of Labor.
So which products and players will be the fiduciary winners and losers?