The Labor Department’s proposed fiduciary prohibited transaction exemption to align with the Securities and Exchange Commission’s Regulation Best Interest could be “a dead letter” if Labor fails to send its final version to the Office of Management and Budget this week, according to Brad Campbell, partner at Faegre Drinker in Washington.
Labor “is effectively out of time” to send a final version of its fiduciary class exemption to align with Reg BI to OMB and have it reviewed and published by Nov. 20, said Campbell, the former head of Labor’s Employee Benefits Security Administration, on Faegre Drinker’s Inside the Beltway webcast Thursday.
If Trump published a final rule before Nov. 20 — 60 days before the end of his term — the Biden administration “typically would have to use notice and comment rulemaking to suspend or modify that regulation,” which is a time-consuming process, Campbell said.
If Trump puts a rule on the books less than 60 days before leaving office, President Biden could squash it “basically with a stroke of a pen.”
The Trump fiduciary rule remains up in the air.