Hold off on the champagne and celebrations—The Wall Street Journal has a different take the Acosta fiduciary announcement from earlier this week.
While generally cheered by proponents of the fiduciary rule as confirmation of its unstoppable momentum, the paper seems to think the June 9 date merely procedural, and the unwinding will occur (or at least begin to occur) before the rule’s January deadline for full implementation.
“Labor Secretary Alexander Acosta said this week that he’ll let the Obama Administration’s fiduciary rule take effect on June 9 while the agency conducts a thorough public review,” the Journal wrote in an editorial Thursday, before making it a partisan issue. “Liberals don’t know whether to celebrate or complain, but Mr. Acosta is showing more respect for the law than his predecessor did.”
Noting how Acosta explained Tuesday that “the agency is bound by the Administrative Procedure Act, which requires due process and public comment before issuing or rescinding regulations,” it added that it usually take several months, and rightly noted that the law only permits a rule change based on new information.
Referencing the Labor Department’s April delay, the paper said, “the worry is that another delay without new information could invite lawsuits claiming that the agency is acting arbitrarily and thwart revisions,” something to which Fi360’s Blaine Aikin referred in his “arbitrary and capricious comments” on Tuesday.
Acosta wrote that the department “found no principled legal basis to change the June 9 date while we seek public input,” and that “respect for the rule of law leads us to the conclusion that this date cannot be postponed.”
However, as mentioned, the rule won’t be fully implemented or enforced until January, and the paper concluded that Acosta “now has a duty to ensure that the department’s career officials who labored on the rule for five years follow due process while legally unwinding it.” [Emphasis ours]
What happens next is anyone’s guess.