AARP seeks to defend DOL fiduciary rule in 5th Circuit
Massive interest group has concerns the Labor Department will not request a rehearing of its vacated regulation by April 30 deadline.
One of the most powerful proponents for the Labor Department’s fiduciary rule will try to protect the measure in court, where it could die as early as Monday.
AARP, the massive interest group for retired Americans, said Thursday it will file papers in the 5th Circuit Court of Appeals asking the court for permission to intervene as a defendant in a lawsuit against the DOL regulation.
In a split decision on March 15, a three-judge panel in the 5th Circuit struck down the DOL rule, which would require brokers to act in the best interests of their clients in retirement accounts. The court decision was a victory for financial-industry opponents of the rule, who argue the DOL overstepped its authority in promulgating what they call a complex and costly regulation.
(More: The latest news and resources on the DOL fiduciary rule)
The Department of Justice, on behalf of the DOL, has until April 30 to appeal the 5th Circuit decision. On Wednesday, a DOJ spokeswoman declined to comment.
It’s likely the Trump administration, which has delayed full implementation of the DOL rule until July 2019 while it reviews the regulation in a study that could lead to major changes, will abandon the rule in court.
But AARP and other proponents say the DOL rule mitigates broker conflicts that erode Americans’ retirement savings.
“AARP is not giving up on our fight to make sure that hard-earned retirement savings have strong protections from conflicts and hidden fees,” said Nancy LeaMond, AARP’s chief advocacy and engagement officer. “Many financial advisers already give advice with the public’s best interests in mind. But the recent court decision allows some financial advisers to provide guidance based on what’s best for their pocketbooks, not the consumers’.”
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