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.