There are long odds the DOL amendments can survive Senate debate, one policy expert and former DOL official told Financial Advisor magazine.
Brad Campbell, former assistant secretary of labor for employee benefits from 2007 to 2009, is predicting that the proposed rule, which seeks to make essentially all rollover recommendations fiduciary advice, won’t escape the fate that derailed the agency’s Obama-era rule.
Campbell also said that he believes the federal court that struck down the Obama-era rule will do the same with the new proposal.
“I don’t think the latest approach solves the Fifth Circuit’s objections. DOL obviously thinks it does. Litigation down the road is probably how we find out,” Campbell he said during a webcast hosted by the law firm Faegre Drinker. Campbell is a partner at the firm.
In 2018, the Fifth Circuit vacated the 2016 DOL fiduciary rule in its entirety on multiple grounds, including the DOL’s failure to treat advisors who “render advice” differently than stockbrokers and insurance agents who primarily “complete sales.”
The panel found the DOL had ignored 40 years of regulatory and court interpretations surrounding the fiduciary principles.