DOL’s notice to suspend fiduciary rule to be reviewed by OBM
On February 10, 2017, the Department of Labor (DOL) filed a Notice of Proposed Rulemaking with the Office of Management and Budget (OMB) to suspend implementation of its fiduciary rule.
President Trump signed an executive order on February 3, directing the DOL to review the fiduciary rule. Labor Secretary Ed Hugler stated that the DOL would review its legal options to push back the rule’s effective date in order to comply with the executive order, thus, the notice to delay fiduciary rule implementation was given.
OMB reviews can take up to two weeks. Once the proposal is approved, the notice will be sent to the Federal Register and published — usually within one day. In the meantime, Congress has initiated the process to review the rule by way of the Congressional Review Act (CRA). The Republican majority in Washington is pushing a CRA for both the DOL rule and the Dodd-Frank Act.
The notice follows a Texas federal trial judge’s ruling in favor of the DOL in a case by nine plaintiffs, including the U.S. Chamber of Commerce and the Securities Industry, against the fiduciary rule. Plaintiffs in the case sought rescission of the rule, asserting that the DOL has continually abused its power. In her ruling, the federal trial judge commented that the DOL had been given discretion to weigh policy concerns and impact the market while protecting retirement investors through the Employee Retirement Income Security Act.