Chamber of Commerce calls on Trump to delay DOL fiduciary rule

The business interest group would like the new administration to halt and then replace the regulation that requires advisers act in the best interests of clients in retirement accounts

Jan 11, 2017 @ 1:39 pm

By Mark Schoeff Jr.

One of the largest and most influential business interest groups is calling on the incoming Trump administration to take immediate steps to delay a Labor Department investment advice rule.

The regulation, which would require financial advisers to act in the best interests of their clients in retirement accounts, was finalized last spring and has an initial implementation deadline of April 10.

The U.S. Chamber of Commerce said Wednesday that that timeline is unrealistic for a rule it argues is too expensive and burdensome for advisers and needs to be overhauled.

“The deadline was unworkable from the get-go. It was a deadline that was set up driven by political motives rather than practical realities,” David Hirschmann, president and chief executive of the Chamber's Center for Capital Markets Competitiveness, told reporters on the sidelines of the Chamber's annual State of American Business event.

“Step one in any change when an administration wants to change a rule is to delay it,” he said. “That's what we're looking for this administration to do in a very timely fashion, because April is just around the corner.”

The Trump administration could slow rule implementation “within days” of taking office without the help of a bill introduced last week in the House to delay the regulation by two years, according to Mr. Hirschmann.

“I'm not sure it would take legislation,” he said. “There are steps the administration could take. If you look at the history of other administrations coming, they've been able to take actions to delay rules that are not yet applicable.”

It won't be as easy as the Chamber suggests to halt the rule, because the Administrative Procedure Act must be followed, according to Barbara Roper, director of investor protection at the Consumer Federation of America.

“Even if they want to delay implementation, they need to go through a notice and comment process, including economic analysis,” Ms. Roper said. “The longer the delay, the more extensive that process and analysis would be. [The Chamber] provided a helpful template for legal challenges based on violations of the APA.”

Legislation could immediately put the brakes on the rule, but it would have to overcome a potential Democratic filibuster in the Senate.

Although business and financial industry lobbyists are pushing action by the Trump administration on the rule, it's not clear where Mr. Trump stands. One of his advisers, Anthony Scaramucci, has advocated repealing the rule. But Mr. Trump has been silent on the issue.

“I don't know that the decision's been made, but I'm confident there are enough folks explaining the consequences” of the rule to Mr. Trump that he will come down against it, Mr. Hirschmann said.

After the delay, the Chamber wants the Trump DOL to craft a different investment advice rule.

“What I expect from the Labor Department [is] to take a look at this from a different perspective, to work with people in the business community and figure out exactly where we ought to go on this,” Chamber president and chief executive Thomas Donohue told reporters.

Repealing and replacing the rule would require a rulemaking process that could take a year or more. It would be a heavy lift, in part, due to the changes financial firms already have made to their advice platforms in anticipation of the rule, Ms. Roper said.

“The money that firms have invested in coming into compliance with the rule counts against changing the rule,” she said.

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