Financial industry expects quick action from Trump to delay DOL fiduciary rule

Lobbyists say the move could come as soon as Friday afternoon, or Monday, in the form of a directive to acting agency heads to postpone and review regulations that aren't yet operational.
JAN 20, 2017
Financial industry lobbyists on Friday were expecting quick action by the Trump administration to delay a Labor Department investment advice rule. Staff members at two trade associations said they were anticipating a move as early as this afternoon, hours after Donald J. Trump was inaugurated, or on Monday. It could come in the form of a directive from the White House to acting agency heads to delay regulations that aren't yet operational and to review them. The lobbyists spoke on condition of anonymity. The Wall Street Journal reported Thursday that the DOL rule would be among the first the Trump administration targets. Industry groups have been urging Mr. Trump to delay the rule, arguing it is too complex and burdensome and will sharply increase the cost of giving and receiving advice. “I would be very surprised if the incoming administration didn't move to address this as an early priority,” Paul Schott Stevens, chief executive of the Investment Company Institute, said in a recent interview. “The first step would be to delay implementation of the rule. That would give the department some time to reconsider it on the merits.” But Mr. Trump may not be able to stall the DOL rule without some heavy lifting. The initial implementation deadline is April 10. It became effective last June. “To delay rules that have passed their effective date without going through a notice and comment period would be a violation of the Administrative Procedure Act,” said Barbara Roper, director of investor protection at the Consumer Federation of America. Proponents of the rule, which requires financial advisers to act in the best interests of their clients in retirement accounts, say it would protect middle-class workers and retires from high-fee investment products that erode savings. In his inauguration speech, Mr. Trump appealed to middle-class Americans who he said have suffered the loss of jobs and wealth as the U.S. manufacturing base declined. “The forgotten men and women of our country will be forgotten no longer,” Mr. Trump said. Ms. Roper said attacking the DOL rule as a first order of business would belie Mr. Trump's rhetoric. “A multibillion-dollar handout for Wall Street and a violation of the rule of law on Day One?” Ms. Roper said. “So much for making America work for the forgotten man and woman.”

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