Lawmakers and public interest groups are balking at the short 30-day comment period the Labor Department has given for its newly proposed exemption for investment advice fiduciaries.
Labor “cut the minimum 60-day comment period in half to just 30 days,” said Stephen Hall, legal director and securities specialist for Better Markets, in a Wednesday statement. “And for another related rule, it skipped the comment period entirely and just declared it ‘final.’”
Hall called the 30-day comment period a “secretive approach to rulemaking [that] is unreasonable, unfair, and contrary to the law.”
The new exemption to align with the Securities and Exchange Commission’s Regulation Best Interest was released on June 29, a day before Reg BI’s June 30 effective date. Labor’s proposal was published in the Federal Register on July 7. Comments are due to Labor by Aug. 6.
Sen. Patty Murray, D-Wash., ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Rep. Bobby Scott, D-Va., chairman of the House Education and Labor Committee, sent a letter to Labor Secretary Eugene Scalia requesting an extended comment period.
Labor’s plan, the lawmakers said, is “a weaker version which would let financial advisors put their own interests ahead of their clients.’”
“Contrary to its name, the proposed rule does not require financial advisors to abide by a fiduciary standard when providing retirement investment advice. Unscrupulous advisors could still prioritize their financial interests and profit motives over that of their clients’ retirement interests,” they wrote.
Thirty days is an “insufficient time for the American public to review and respond to a complex, 123-page proposed rule,” Murray and Scott wrote.
Specifically, the lawmakers said, the proposed rule requires familiarity with the 770-page Reg BI.
“The DOL owes it to the public to take the time to meaningfully engage with people about their concerns rather than rushing through a rule that would seriously damage the retirement security of people across the country,” the lawmakers told Scalia. “During the middle of a pandemic, when people across the country are grappling with severe economic and health challenges, it is as important as ever for the DOL not to arbitrarily and unfairly rush through this process.”
Better Markets penned a letter along with other public interest groups urging Labor to extend the comment period on the proposal to at least 90 days.
“The letter makes clear that 90 days is the minimum amount of time necessary for all stakeholders to analyze the rule and prepare their comments. That’s because the proposal is so complex and important, affecting almost every American struggling to save for a decent retirement,” Hall said. “Such a short comment period even conflicts with the law, which provides that the public must have a meaningful opportunity to comment on rule proposals, with a minimum of 60 days if not more.”