Secretary of Labor Alexander Acosta hinted Wednesday that the Obama administration didn't adequately consider "concerns" raised during the rulemaking process surrounding the Department of Labor's fiduciary rule.
Mr. Acosta made the remark during congressional testimony, after Rep. Steve Womack (R-Arkansas) asked: "Is it not obvious that [the fiduciary rule] is going to limit [investors'] options? Does it have some far-reaching effects that would be counterproductive to particularly younger generations' savings opportunities?"
The argument that the regulation will reduce access to investment options is common among critics of the regulation, which will raise investment-advice standards in retirement accounts once its phased implementation period
begins June 9.
"There are concerns. Those concerns were voiced in the original rulemaking process, and the prior administration made a decision that those concerns were outweighed by what the prior administration wanted to do," Mr. Acosta said in response.
"Those concerns certainly surfaced the first time around, and unfortunately they were not heard. And that's what happens," Mr. Acosta added.
The secretary made his comments during a hearing before the U.S. House of Representatives' Subcommittee on Labor, Health and Human Services, Education, and Related Agencies regarding the DOL's budget.
The DOL under Mr. Acosta is currently conducting a review of the fiduciary rule, as
directed earlier this year by the Trump administration. The DOL has sent a request for information to the Office of Management and Budget, which
received the request on Tuesday and will issue it publicly after completing a review.
The request for information will seek response from industry stakeholders and consumers about the fiduciary rule and how it's being implemented, and is "the first step in the administration's review of that rule," Mr. Acosta said.
"We need that information and we need that data in order to decide how to proceed," he added.
Micah Hauptman, financial services counsel at the Consumer Federation of America, believes Mr. Acosta is incorrect in saying the Obama administration's Labor Department didn't effectively consider the concerns of rule opponents during the rulemaking process. The previous DOL "carefully scrutinized" these arguments and "rightly determined they were meritless and self-serving," he said.
"The industry opponents' sky-is-falling claims have become even less credible as firms have implemented the rule and made statements confirming that it will benefit investors," Mr. Hauptman said.
