Second Judge Vacates DOL Fiduciary Rule, Dealing Death Blow

On March 12, Judge Jeremy Kernodle of the U.S. District Court for the Eastern District of Texas issued the first ruling to vacate, which was unopposed by the Labor Department or by the Federation of Americans for Consumer Choice, which challenged the fiduciary rule in a separate case.

"The Department's decision to end this case and the Court's order vacating the fiduciary rulemaking package closes the chapter on the Biden Administration's legally flawed fiduciary regulation," The American Council of Life Insurers, National Association of Insurance and Financial Advisors, Finseca, Insured Retirement Institute, and National Association for Fixed Annuities said Tuesday in a joint statement.

"The Court's ruling confirms the Biden rule conflicts with current law and exceeded the Department's authority," the groups said.

"Consumers no longer face the threat of losing access to their choice of professional financial guidance or retirement products due to a poorly crafted, unnecessary Department of Labor regulation," said Wayne Chopus, IRI's president and CEO. "We said from the beginning that the DOL regulation was not needed, and the court's decision validates our view."

Added Chopus: "Now that both one-size-fits-all fiduciary rules have been conclusively struck down by federal courts in the past decade, we hope that this issue is now resolved, and consumers will enjoy unimpeded access to their choice of financial guidance and retirement products to suit their needs."

Labor plans to issue a fiduciary rule in May, according to its regulatory flexibility agenda.

Brad Campbell, former head of Labor's Employee Benefits Security Administration, who's now a partner at Faegre Drinker in Washington, told ThinkAdvisor that Labor has other priorities and that another fiduciary rule may not be coming due to "regulatory fatigue on this issue."