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DOL Fiduciary News: May 23, 2017

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Deregulators Must Follow the Law, So Regulators Will Too [Acosta op/ed]

The Wall Street Journal (op/ed); May 22, 2017 7:00 p.m. ET

By Alexander Acosta, United States Secretary of Labor

President Trump has committed—and rightly so—to roll back unnecessary regulations that eliminate jobs, inhibit job creation, or impose costs that exceed their benefits. American workers and families deserve good, safe jobs, and unnecessary impediments to job creation are a disservice to all working Americans. As the Labor Department approaches this regulatory rollback, we will keep in mind two core principles: respect for the individual and respect for the rule of law.

America was founded on the belief that people should be trusted to govern themselves. Citizens sit on juries and decide the fate of their fellow citizens. Voters elect their representatives to Washington. By the same token, Americans should be trusted to exercise individual choice and freedom of contract. At a practical level, this means Washington should regulate only when necessary. Limiting the scope of government protects space for people to make their own judgments about what is best for their families.

The rule of law is America’s other great contribution to the modern world. Engraved above the doors of the Supreme Court are the words “Equal Justice Under Law.” Those four words announce that no one is above the law, that everyone is entitled to its protections, and that Washington must, first and foremost, follow its own rules. This means federal agencies can act only as the law allows: The law sets limits on their power and establishes procedures they must follow when they regulate—or deregulate.

The Administrative Procedure Act is one of these laws. Congress had good reason to adopt it: In the modern world, regulations are akin in power to statutes, but agency heads are not elected. Thus, before an agency can regulate or deregulate, it must generally provide notice and seek public comment. The process ensures that all Americans—workers, small businesses, corporations, communities—have an opportunity to express their concerns before a rule is written or changed. Agency heads have a legal duty to consider all the views expressed before adopting a final rule.

…The Labor Department has concluded that it is necessary to seek additional public input on the entire Fiduciary Rule, and we will do so. We recognize that the rule goes into partial effect on June 9, with full implementation on Jan. 1, 2018. Some have called for a complete delay of the rule.

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.  
(http://www.wsj.com)

DOL Won’t Delay June 9 Fiduciary Rule Compliance Date: Acosta

ThinkAdvisor; May 22, 2017

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.”
(http://www.thinkadvisor.com)

Phyllis Borzi says opponents of DOL fiduciary rule face uphill climb to further delay or dilute it

InvestmentNews; May 22, 2017 @ 9:29 am

A former Labor Department official who developed the agency's fiduciary rule said on Sunday that opponents of the measure face a steep climb in trying to further delay or overhaul it.

Phyllis Borzi, a former assistant DOL secretary who is known as the mother of the regulation, said that the Trump administration is not likely to be able to repeal the rule simply because it doesn't like the measure. Instead, it will have to cobble together a body of evidence that justifies such a move, something she says that critics have failed to do so far.

In contrast, she said, the Obama administration spent six years formulating the rule and incorporating feedback through extensive public comments, "hundreds and hundreds" of meetings with interest groups and showing Securities Exchange and Commission staff "every single draft" of the rule.

"Opponents of the rule are going to find it extremely difficult to successfully delay or substantially dilute the rule," Ms. Borzi said at the Fi360 annual conference in Nashville, Tenn. "They need to create a record that is as strong, as comprehensive as the record that we created over the six years."
(http://www.investmentnews.com)