As expected, the Department of
Labor filed a notice Thursday with the Office of Management and Budget to delay
implementation of its fiduciary rule via a Notice of Proposed Rulemaking.
OMB reviews generally take from
10 to 14 days and then once OMB approves the proposal, Labor will send the
notice to the Federal Register for publication – generally within one day.
The notice filed at OMB Thursday
does not say how long Labor plans to delay the rule’s April 10 compliance date,
though 180 days has been widely discussed. Details of the plan won’t be
revealed until OMB approves the notice, which could be published in the Federal
Register by the end of February.
The notice of delay comes just a
day after Texas federal trial Judge Barbara M.G. Lynn ruled in favor of the
Labor Department in the case brought by nine plaintiffs against Labor’s
Lynn had promised a ruling by
Friday; her ruling was the third court victory for Labor’s fiduciary rule.
The nine plaintiffs, including
the U.S. Chamber of Commerce, the Securities Industry and Financial Markets
Association and the Financial Services Institute, sued the DOL over its
fiduciary rule in a federal court in Texas.
The nine plaintiffs in the Texas
case are represented by former Labor Department solicitor Eugene Scalia, who’s
a partner in Gibson, Dunn & Crutcher’s Washington office and a son of
deceased Supreme Court Justice Antonin Scalia.
In a joint statement, the
co-plaintiffs said: “We continue to believe that the Department of Labor
exceeded its authority, and we will pursue all of our available options to see
that this rule is rescinded.” President Donald Trump's recent directive to the
department to review the rule is “reflecting well-founded, ongoing and
significant concerns about the rule, [and] is a welcome development.”
Said Lynn in her ruling: “In
contrast to the situations in the cases cited by Plaintiffs, in [the Employee
Retirement Income Security Act] Congress did speak clearly, and assigned the
DOL the power to regulate a significant portion of the American economy, which
the DOL has done since the statute was enacted.”
Congress, Lynn said, “gave the
DOL broad discretion to use its expertise and to weigh policy concerns when
deciding how best to protect retirement investors from conflicted
Trump signed an executive order
on Feb. 3 directing the Labor Department to undertake an assessment of its
fiduciary rule, and if it deems appropriate, a proposal to revise the
rulemaking, which industry officials say would delay the rule’s April 10
Acting Labor Secretary Ed Hugler
said in a statement the same day that the DOL would “consider its legal options
to delay the applicability of the date as we comply with the president’s
here for the original article from Think Advisor.