Labor Secretary Alexander Acosta told a congressional committee that the final notice to delay the fiduciary rule’s implementation to July 1, 2019, will be published “soon,” while the department continues its analysis.

Acosta, speaking before the House Committee on Education and Workforce, did little to quell concerns that the DOL may not push forward with the full rule and, in fact, referenced President Trump’s executive order requiring the DOL to undertake an economic and legal review of the fiduciary rule.

At the same time, Preston Rutledge, who was nominated to be assistant labor secretary for the Employee Benefits Security Administration (EBSA), told lawmakers at his confirmation hearing before the Senate Health, Education, Labor and Pensions Committee that he is not opposed to the rule, but wants to make sure it does not hurt retirement plan participants. If confirmed as EBSA assistant secretary, Rutledge will directly oversee the implementation of the fiduciary rule.

Several lawmakers asked Acosta about the status of the fiduciary rule. The Labor Secretary said the standard went into effect in June, but that full implementation, including the remedy options available, are included in the notice that is pending at the Office of Management and Budget. He has said previously he expects the extension to get OMB approval by the third or fourth week of November.

Acosta did not shed much light on what the new rule would or wouldn’t include, but said “the title of that notice would make clear that there is an 18-month extension if that notice goes forward,” Acosta said.

Acosta told lawmakers that the Securities and Exchange Commission should be a partner in the rulemaking process and collaborate with the DOL on the fiduciary rule. The Labor Secretary noted that the SEC declined to be a partner with the DOL in developing a fiduciary rule during the past administration, but said he believes the agency has an important role to play.

He also pointed lawmakers to his May editorial, “Deregulators Must Follow the Law, So Regulators Will Too,” in The Wall Street Journal, in which he underscored President Trump’s executive order requiring that the DOL undertake an economic and legal review of the fiduciary rule.

Acosta wrote that “President Trump has committed—and rightly so—to roll back unnecessary regulations that eliminate jobs, inhibit job creation, or impose costs that exceed their benefits. American workers and families deserve good, safe jobs, and unnecessary impediments to job creation are a disservice to all working Americans. As the Labor Department approaches this regulatory rollback, we will keep in mind two core principles: respect for the individual and respect for the rule of law.”

The DOL’s enforcement of the fiduciary rule continues to be in “compliance assistance mode,” Acosta said.

“What would happen if a retiree is not provided advice that is in their best interest” during the rules transition period? asked Rep. Bobby Scott (D-Va.). 

Acosta said that as long as companies are proceeding in good faith to implement the best interest standard, the DOL is working in “compliance assistance mode” to help broker-dealers and advisors meet the requirements of the rule. But if companies are not proceeding in good faith, Acosta said, the DOL has enforcement authority.

Proponents of the rule—which for the first time would require that brokers who work with investors in retirement plans put client interests first—fear that the DOL’s delay is actually a stay.

The Consumer Federation of America “strongly objects” to the DOL’s delay. “Extending this transition period will mean that the full protections and benefits of the fiduciary rule won’t be realized and retirement savers, particularly IRA investors, will continue to suffer the harmful consequences of conflicted advice,” CFA Director of Investor Protection Barbara Roper and Financial Services Counsel Micah Hauptman said in letter to the DOL on the proposed delay. “The department has not provided an adequate factual or legal basis for this proposal, nor is the proposal consistent with the department’s previous analysis and findings in promulgating the rule and its related exemptions.”

At Rutledge’s confirmation hearing, Rep. Patty Murray (D-Wash.), asked the nominee if he has “discomfort” with the fiduciary rule. “Given that conflicted advice costs about $17 billion annually, do you support delaying this rule?” Murray  asked.

Rutledge said he cannot commit the department to a position on how to proceed with the rule until he is confirmed.

“I have reviewed the presidential memorandum and it appears to me to direct the department to review the rule, but to review it from the perspective like ERISA has always been, in my experience, from the perspective of the investor, the participant, the worker and the retiree,” Rutledge told lawmakers.

Rutledge also said he does not have discomfort with the rule, but had expressed discomfort earlier when the DOL would have been charged with overseeing excise taxes triggered under the rule while not having a “seat at the table” for rulemaking.