Labor Secretary Alexander Acosta said Monday that Labor will not delay the fiduciary rule’s June 9 compliance date while the department seeks public input on the rule as laid out in President Donald Trump’s Feb. 3 memorandum.
“The Labor Department has concluded that it is necessary to seek additional public input on the entire fiduciary rule, and we will do so,” Acosta said in a Monday op-ed in The Wall Street Journal.
“We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” Acosta wrote. “Respect for the rule of law leads us to the conclusion that this date cannot be postponed. Trust in Americans’ ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule.”
Under the Obama administration, Acosta continued, “the Securities and Exchange Commission declined to move forward in rulemaking. Yet the SEC has critical expertise in this area. I hope in this administration the SEC will be a full participant.”
The same day, the Labor Department issued Field Assistance Bulletin No. 2017-02 instituting a temporary enforcement policy, which states that Labor “is actively engaging in a careful analysis” of the issues raised in the president’s memorandum.
Also released by the Department Monday is frequently-asked-questions guidance regarding the rule’s transition period.
“It is possible, based on the results of the examination, that additional changes will be proposed to the fiduciary duty rule and [prohibited transaction exemptions],” the field assistance bulletin states.
The department also intends to issue a request for information (RFI) “in the near future seeking additional public input on specific ideas for possible new exemptions or regulatory changes based on recent public comments and market developments.”
Labor states that it is “also aware that after the fiduciary duty rule and PTEs were issued firms have begun to develop new business models and innovative market products to mitigate conflicts of interest.”
The RFI will specifically ask for public comment on whether it is likely to take more time to implement these new approaches than what the department envisioned when it set Jan. 1, 2018, as the applicability date for full compliance with all of the exemptions’ conditions, and, if so, whether an additional delay of that date would reduce burdens on financial services providers and benefit retirement investors by allowing for a smoother implementation of those market changes.
Said Acosta in his op-ed: “From administration to administration, respect for the rule of law has remained, even when Americans have been bitterly divided. Some who call for immediate action on the Obama administration’s regulations are frustrated with the slow process of public notice and comment. But this process is not red tape. It is what ensures that agency heads do not act on whims, but rather only after considering the views of all Americans. Admittedly, this means deregulation must find its way through the thicket of law. Casting aside the thicket, however, would leave Americans vulnerable to regulatory whim.”
The Labor Department, he continued, “will roll back regulations that harm American workers and families. We will do so while respecting the principles and institutions that make America strong.”