While opponents of the Department of Labor’s fiduciary rule welcomed the final rule’s delay on Wednesday, they’re up in arms over what they say is the failure of the rule to comply with President Donald Trump’s directive to review the rule in its entirety.
At first blush, Labor’s 60-day delay that’s to be released in the Federal Register on Friday “appeared to be a very good first step in the review” ordered by Trump on Feb. 3, said Kent Mason, a partner at Davis & Harman in Washington. “But the problem is that in yesterday’s announcement, DOL indicates very clearly that it does not plan to revisit the June 9 date in the context of the review” ordered by Trump.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said in a Wednesday statement that SIFMA is concerned that the rule “contains convoluted extraneous conditions that are not only based on imperfect data but contradicts the intent” of Trump’s Feb. 3 order.
“The memorandum directs a review of the entire rule and its impact, not part,” Bentsen said. “We trust the department will undertake a sufficiently substantive review as requested by the president to ensure investors are not unduly harmed.”
Meanwhile, at an event held on Capitol Hill Wednesday, Sen. Elizabeth Warren, D-Mass., a staunch advocate of Labor’s fiduciary rule, released a Retirement Ripoff Counter, which she said details how important it is that the fiduciary rule be “fully” implemented.
“With Republicans now in control of the White House, the Senate and the House, consumer protection is under siege,” Warren said, “with one of the principal objects to make sure that the fiduciary rule does not go into effect.”
The Retirement Ripoff Counter, created by the Save Our Retirement Coalition of unions and consumer groups, is “a way to show what bad rules do,” Warren said.
Since Trump’s Feb. 3 order, “Americans have lost nearly $2.9 billion” from conflicted retirement advice. “That’s $46 million per day,” she added.
Warren stated that “families stand to lose nearly $4 billion because of the two-month delay” that the Trump administration just finalized.
Said Warren: “These numbers are huge…. I want you to think about what it means family by family,” adding that “being in this fight [for the fiduciary rule] matters, because it has already begun to change the industry, [with] prices and fees coming down and some of the worst products coming off the shelf.”
The “counter will be turning up, and we look forward to surprising you with exactly where,” added Lisa Donner, executive director of Americans for Financial Reform, who also spoke at the event.
Mason noted that under the final rule issued Wednesday, Labor “characterizes the new definition of a fiduciary ‘as among the least controversial aspects of the rulemaking project.’”