Fiduciary advocates are urging the incoming Trump administration to spare the LaborDepartment’s fiduciary rule, as government lawyers press aWashington judge not to put on hold his recent ruling that upheldthe merits of the regulations.

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As speculation intensifies that the fiduciary rule could be on the choppingblock or significantly curtailed under President DonaldTrump and a GOP-controlled Congress, members of theSaveOurRetirement Steering Group — AFL-CIO, AFSCME, Americans forFinancial Reform, Better Markets, Consumer Federation of Americaand the Pension Rights Center — issued a statement telling Trump to“make good on his election talk by supporting the rule — andchoosing regular Americans over Wall Street.”

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Trump, the coalition said, “campaigned on the promise to makegovernment work for hard-working Americans, not specialinterests. One key test of his commitment will be whatposition he takes” on the Labor Department’s fiduciary rule. Therule, years in the making, seeks to mitigate conflicts of interestin the retirement advice market.

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“The election outcome did not change the fact that Americansdeserve and need retirement investment advice that is in their bestinterest — not advice that is compromised by their advisor’sconflict of interest,” the coalition statement said.

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Meanwhile, the Labor Department on Monday urged U.S. DistrictJudge Randolph Moss in Washington not to stay hisruling pending appeal by the National Association for FixedAnnuities, or NAFA.

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Moss on Nov. 4, in a 92-page ruling, denied theannuities association’s request for a preliminary injunctionto block the rule. He simultaneously ruled in favor of the LaborDepartment on the merits of the rule.

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NAFA said on Nov. 7 it would appeal Moss’ decision.The group asked the judge to put his ruling on hold while the caseis pending in the U.S. Court of Appeals for the D.C. Circuit.

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“NAFA’s proposed injunction could potentially save the annuityindustry from further compliance costs, but this is meaningful onlyif the rulemaking is ultimately struck down,” Justice Departmentlawyers wrote in their court filing on Monday.

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The DOL's fiduciary rule, which was developed to protect consumer rights, is wading through several legal challenges. (Photo: iStock)TheDOL's fiduciary rule, which was developed to protect consumerrights, has faced several legal challenges. (Photo:iStock)

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“To make it plausible for the industry to cease preparationsnow, NAFA asks that the court to guarantee a lengthy complianceperiod if, as is likely, NAFA loses on appeal. This comfort for theindustry would come at great expense to the investors who willcontinue to be harmed in the interim.”

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The case in Washington challenging the fiduciary rule is one ofseveral pending actions in federal courts around the country.

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Lawyers who attended oral arguments last week in Texasfederal district court — the U.S. Chamber of Commerce is a leadplaintiff there — offered differing views on how the presidingjudge, Barbara M.G. Lynn, might rule.

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U.S. District Judge Daniel Crabtree in the District of Kansaspresided over the second hearing against the fiduciary rule, whichtook place on Sept. 23. He has yet to render a decision.

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Thrivent Financial for Lutherans became the sixthplaintiff to bring a complaint against the rule. The insurerfiled a suit in late September in U.S. District Court for theDistrict of Minnesota, challenging the class-action waiverrequirement under the rule’s best interest contract exemption, orBICE. Oral arguments have yet to be scheduled.

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Melanie Waddell

Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2023. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.