Update: The United States District Court for Northern District of Texas has denied a challenge to the fiduciary rule from the U.S. Chamber of Commerce, the Indexed Annuity Leadership Council and the American Council of Life Insurers, as well as a the DOJ’s request Wednesday for a postponement of President Trump’s executive memorandum, originally reported below.
The Justice Department is backing its sibling’s cause, asking a Texas federal judge to postpone deciding on whether the Department of Labor’s fiduciary rule will be implemented on its original April deadline.
The DOJ noted that on February 3, 2017, the president issued a memorandum to the Secretary of Labor, directing the Secretary to “examine the Fiduciary Duty Rule” and to “prepare an updated economic and legal analysis” of the Rule in regard to three enumerated considerations, among other things.
“The memorandum further directed that if the Secretary ‘make[s] an affirmative determination as to any one of the [enumerated] considerations,” or for any other reason after appropriate review, he “shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.’”
The Department said it is carefully reviewing the issues raised in the President’s memorandum, “with the immediate goal of deciding the best course of action to implement its spirit and intent. The Department is assessing its legal options for delaying the applicability date (the first of which is April 10).”
As a result, the DOJ claims it “would not serve judicial economy to issue a ruling at this point; nor would it be efficient for this Court, for the Court of Appeals for this Circuit, or for the parties to be confronted by a range of appellate issues at this time.”
“Further, a judicial decision on a rulemaking as complex as this while the Department is undertaking the examination and potential promulgation of a proposal pursuant to the Presidential Memorandum can be expected to cause confusion with the affected public, whether parties to this litigation or not.”
The DOJ then “respectfully” requested that the court stay the proceedings in this action pending the results of the review directed by the president.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
