A confusing Friday at the White House concluded with President Donald J. Trump failing to order a delay of the Department of Labor fiduciary rule.
The last-minute change in policy means the fiduciary rule is still set to begin taking effect April 10.
The president would be signing two orders related to financial services, Press Secretary Sean Spicer said Friday, just prior to the ceremony. One was to order a review of Dodd-Frank and the other was expected to be a review and delay of the fiduciary rule.
In a Thursday interview with The Wall Street Journal, Gary Cohn, chief economic advisor to Trump, said the fiduciary rule would be eliminated.
“It’s a bad rule for consumers,” he added.
But at the end of the day, Trump only signed one generic order directing the Secretary of the Treasury to review all laws and regulations related to the financial system and report to the president within 120 days.
The order doesn’t mention Dodd-Frank or the fiduciary rule. It directs the treasury secretary to evaluate the financial system against a set of six “core principles.”
Trump also signed a memorandum on the fiduciary rule. It orders a significant review of the rule, but no specific delay.
“You are directed to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice,” the memo stated. “As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule.”
According to InvestmentNews, the final memo removed two strong sections that had been a part of a draft memo: an order to delay the fiduciary rule for six months and an order directing the DOL to consult with the Department of Justice to seek a stay of the litigation surrounding the rule.
As a result, the memo confused stakeholders on both sides of the issue. House Speaker Paul Ryan, R-Wis., tweeted: “President Trump’s action to delay the #fiduciary rule is a wise one.”
Meanwhile, the Financial Planning Association – a group of fee-only planners who support the rule – issued a statement critical of the president for his “directive to stop the DOL fiduciary rule.”
The memo leaves the door open for the DOL to undertake a new rulemaking process to undo the fiduciary rule, which applies a fiduciary standard of care to anyone selling financial products with retirement dollars.
“If you conclude … after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law,” the memo stated.
Acting U.S. Secretary of Labor Ed Hugler issued a one-sentence statement following the release of Trump’s memo.
“The Department of Labor will now consider its legal options to delay the applicability date as we comply with the President’s memorandum,” it read.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com.
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