A member of the U.S. House Committee on Education and the Workforce introduced a bill Friday to delay the implementation of the U.S. Labor Department's fiduciary rule by two years.
The rule “is one of the most costly, burdensome regulations to come from the Obama administration,” U.S. Rep. Joe Wilson, R-South Carolina, said in a statement introducing the bill. “Rather than making retirement advice and financial stability more accessible for American families, they have disrupted the client-fiduciary relationship, increased costs and limited access.”
Compliance with the rule, which seeks to minimize conflicts of interest in the retirement-savings industry, starts April 10. Wilson said delaying the implementation of the rule would give “Congress and President-elect Donald Trump adequate time to re-evaluate this harmful regulation.”
Industry groups were quick to throw their support behind the bill.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said "a delay in applicability would be prudent to allow the new Congress and administration to review a better course to protect investors.” Bentsen said members of his group "have worked diligently to prepare for implementation, at great cost and with consequential impacts on retirement savers."
Cathy Weatherford, president and CEO of the Insured Retirement Institute, said her group has "long-standing concerns about the rule and its harmful impact on retirement savers. A delay is much needed and will provide more time to policymakers to reevaluate it and protect consumers from its negative consequences.”
Barbara Roper, director of investor protection at the Consumer Federation of America and a staunch fiduciary rule supporter, criticized the move to delay implementation of the fiduciary rule.
"I suppose it is kind of refreshing that Rep. Wilson didn’t even pretend to seek input from anyone but the financial lobbyists in crafting a bill to 'protect American families’ financial advice," she said. "If he had, he’d know that the public, including a strong majority of Trump voters, want the rule to move forward."
Wilson’s "intent is not simply to delay implementation but to provide the time needed to kill the rule or water it down to the point of meaninglessness," Roper added. "It is essential that congressional Democrats recognize the real intent here and oppose this measure as strenuously as they would oppose a bill to repeal the rule."
The Securities Industry and Financial Markets Association is among nine plaintiffs that filed a suit in Texas against the fiduciary rule. U.S. District Judge Barbara M.G. Lynn heard oral arguments on Nov. 17 in that case. A ruling is pending. Other plaintiffs include the U.S. Chamber of Commerce and the Financial Services Institute.
Two federal courts recently blocked attempts by the insurance industry to halt the rule. The U.S. Court of Appeals for the D.C. Circuit last month refused an emergency request from the National Association for Fixed Annuities, or NAFA, to block the rule from taking effect in April.
Chip Anderson, the annuity group's executive director, told members in a recent email that the association “disagrees and is deeply disappointed” in the D.C. Circuit’s order denying the request for an injunction pending appeal. “The court gave no real rationale for its decision," he said. "We are exploring all opportunities for further judicial review and look forward to a full briefing on the merits."
Pamela Heinrich, general counsel to NAFA, said Friday that the D.C. Circuit is expected soon to publish a briefing schedule that “will give us a better timing of the appeals process."
She added, however, that NAFA “continues to consider all of its options with respect to its litigation. No options are off the table at this point.”
Anderson said NAFA remains “very hopeful the new administration will repeal this anti-consumer regulation, and we continue to work with our contacts on [Capitol] Hill to effect that outcome.”