With only three weeks until the Labor Department’s fiduciary rule is set to kick in, the National Association for Fixed Annuities continues its full-court press in urging Labor to further delay the rule.
Eric Marhoun, chairman of NAFA’s DOL steering and litigation committee, who’s also executive vice president and general counsel for Fidelity & Guaranty Life in Des Moines, told ThinkAdvisor in a Friday interview that “based on recent conversations and meetings with representatives of the administration and Congress, it is my impression that the administration is considering all options for further delaying the DOL rule, including an interim final rule or Section 705 relief – which I believe to be the top choices for delay at this point.”
While other industry trade groups have been pushing Labor Secretary R. Alexander Acosta to adopt an interim final rule to bypass comment period restrictions, NAFA is pressing Acosta to consider invoking a provision of the Administrative Procedures Act known as Section 705, which allows delay of any administrative action that is being challenged in court.
NAFA is appealing a federal court’s denial of its bid to block the fiduciary rule in the D. C. Circuit Court of Appeals, while other legal challenges are also pending, including an action brought by the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute in the 5th Circuit Court of Appeals.
But Micah Hauptman, financial services counsel for the Consumer Federation of America, told ThinkAdvisor Friday that DOL “should expect to be sued if it bows to the industry opponents’ pressure and plays fast and loose with its legal requirements.”
The Consumer Federation is a staunch supporter of Labor’s fiduciary rule.
“Industry opponents’ desperation to avoid serving their clients’ best interest must be getting pretty intense if they’re pressuring the DOL to go this [section 705] route,” Hauptman said.
NAFA launched a grassroots campaign on May 8 to appeal directly to the Trump administration as well as to Acosta to stop the Labor’s fiduciary rule from taking effect on June 9.
More than 2,200 NAFA members have already written the White House urging Trump to stop the rule from taking effect. “We feel we must take our message straight to the White House so President Trump knows our members are very worried and are counting on him to prevent any part of this onerous rule from taking effect,” said NAFA’s executive director Chip Anderson, in a Friday statement.
Labor “has never fully considered exercising its authority under Section 705 and perhaps now is the time to do that,” Anderson said. “Section 705 makes a lot of sense here because the rule has not taken effect yet, it’s being challenged in court, and there is no doubt the rule would cause great harm to industry and consumers.”
Anderson said, however, that NAFA is indifferent as to what method is used by the Trump administration to delay the rule. “To us, what is important is the administration take back control of this issue so the president’s agenda does not get undermined by that June 9 implementation date.”