Nine groups filed a lawsuit late Wednesday to block Department of Labor's fiduciary rule. Here are some reactions by people and organizations in the industry to the lawsuit:
A joint statement by the CEOs of the five national organizations that brought the suit — the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association, the Financial Services Institute, the Financial Services Roundtable and the Insured Retirement Institute.
“Our organizations have a long, well-documented record of support for the creation of a uniform best interest – or fiduciary – standard of customer care for financial professionals providing personalized investment advice to retail investors. The Department of Labor's new, 1,023-page rule, however, creates sweeping changes to existing regulations that will make saving for retirement more difficult for the very same hardworking American families and individuals it claims to protect. It specifically hinders many of our member firms' ability to continue providing the level of holistic financial advice and suitable investment options their clients are accustomed to. Our organizations are now asking a court to review whether the Department of Labor overstepped its boundaries, creating a rule that will leave Americans with fewer retirement choices, higher costs and reduced access to professional financial advice. Further the 'private right of action' mechanism creates significant new legal risk for financial advisers, who will face the threat of class action lawyers challenging their every move. This lawsuit is necessary to prevent the Labor Department from exceeding the authority that was assigned to it by Congress. More importantly, it will protect retirement savers and our member firms, who are committed to their financial futures.”
(Related read: The DOL fiduciary rule from all angles)
U.S. Labor Secretary Thomas Perez
“People saving for retirement have a legal right and a compelling economic need to receive retirement investment advice that is in their best interest. Today, a handful of industry groups and lobbyists are suing for the right to put their own financial self-interests ahead of the best interests of their customers. Conflicted advice is eroding the savings of working Americans to the tune of $17 billion each year. The conflict of interest rule aims to address that problem by requiring retirement advisers to look out for the best interests of their clients. But there is a small, vocal minority who support the status quo that enables them to put their own interests first. This lawsuit seeks to vindicate their desire to put their own interests ahead of their clients' best interests. The department's conflict of interest rule is built upon solid statutory and legal foundations, and we will defend it vigorously.”
Reps. Elijah E. Cummings (D-Md.), Maxine Waters (D-Calif.) and Bobby Scott (D-Va.)
"Quite simply, the Department of Labor's new rule helps ensure our workers and seniors receive retirement investment advice that's in their best interest. The industry's lawsuit seeks to block this much-needed and long overdue rule. The lawsuit is also out of step with many other financial officials and firms that publicly acknowledged the department listened to their concerns and struck the right balance in its final rule."
The Financial Planning Coalition (Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors )
“The Financial Planning Coalition is extremely disappointed that these organizations have resorted to litigation to challenge a popular and common-sense rule that is long overdue. Any further delay in the implementation stands to negatively impact millions of American retirement savers. We urge these organizations to instead join many in the financial services industry who have already begun implementing the rule, recognizing that the final fiduciary rule is good for businesses and for consumers.”
Consumer Federation of America
“The Department of Labor has produced a balanced rule that strengthens protections for retirement savers while preserving the ability of firms to operate under a variety of business model,” said CFA Director of Investor Protection Barbara Roper. “A number of firms have expressed their willingness to move forward with implementation of the rule. Investors should take note of those firms that are so opposed to acting in the best interest of their customers that they are prepared to spend millions on a legally questionable lawsuit to overturn this badly needed rule.”
Dennis Kelleher, president and CEO of Better Markets
“If Wall Street really cared about Main Street, it would already act in its clients' best interest, rather than secretly pocketing tens of billions of dollars from hardworking Americans just trying to save for a decent retirement. After spending five years and tens of millions of dollars fighting against the DOL's rule, this lawsuit is Wall Street's desperate, last-ditch effort to kill it. They don't want this long-overdue, carefully-considered, and well-crafted rule to require them to do what they should have been doing all along: put their clients' best interests first when giving retirement investment advice. In addition, Wall Street is brazenly attempting to shop for a favorable court by filing the lawsuit in Federal District Court in Dallas, Texas, where the Fifth Circuit Court of Appeals is believed to be especially friendly to businesses rather than consumers and investors.”
Grover Norquist, President of Americans for Tax Reform
