DOL Fiduciary Update - 60 Day Delay Proposed by DOL

Discussion in 'Annuities Forum' started by scagnt83, Mar 1, 2017.

  1. walthamny

    walthamny Well-Known Member

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    There is zero chance the secretary can suspend the law indefinetely. The courts will block that quickly. I still expect them to modify the law to take out class action portion out. I am a small RIA, my clients will never get together and sue me but for big firms that is a big risk. There is enough bi partisan support to take that out.

    One way the DOL bill can stopped now would be a 30% drop in the market in the next 3 weeks. That would give secretary some cover to put the law on hold.
  2. Brian Anderson

    Brian Anderson Moderator Moderator

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    NAFA just sent the following press release out, asserting there are "a number of viable options" available to Acosta to delay the rule, including invoking "Section 705" which allows delay of any administrative action being challenged in court.


    NAFA Asserts DOL Secretary Has Options for Delaying Rule

    Washington, D.C. (May 19, 2017) – NAFA, the National Association for Fixed Annuities, is continuing its full-court press on the Trump administration to further delay the fiduciary rule, which is set for implementation three weeks from now absent further administrative action.

    NAFA reports over 2200 of its members have already written the White House urging President Trump to stop the rule from taking effect on June 9th. “We feel we must take our message straight to the White House so President Trump knows our members are very worried and are counting on him to prevent any part of this onerous rule from taking effect,” said NAFA’s executive director Chip Anderson.

    While NAFA’s grassroots efforts are focused on the White House, Anderson indicated NAFA is also talking with members of Congress and at the same time coordinating with industry trade groups through a coalition called Secure Family that is running advertisements in Washington newspapers urging further delay. “NAFA is pulling out all the stops because it will be a disaster if this rules goes into effect before the Labor Department has reexamined the rule in its entirety, as mandated by the President’s February 3rd directive,” said Anderson.

    NAFA asserts a number of viable options are available to newly installed Labor Department Secretary Alexander Acosta to delay the rule even though time is growing short. “If there is the will, there is a way,” says Anderson.

    While other industry trade groups have been rallying around the idea that Secretary Acosta should adopt an interim final rule to bypass comment period restrictions, NAFA is urging Secretary Acosta to consider invoking a provision of the administrative procedures act known as Section 705, which allows delay of any administrative action that is being challenged in court. NAFA currently has a lawsuit against the rule that is up on appeal in the D. C. Circuit Court of Appeals while several other legal challenges are also pending, including an action brought by the Chamber of Commerce in the 5thCircuit Court of Appeals.

    “We believe the Department has never fully considered exercising its authority under Section 705 and perhaps now is the time to do that. Section 705 makes a lot of sense here because the rule has not taken effect yet, it’s being challenged in court, and there is no doubt the rule would cause great harm to industry and consumers. So, this is a good option for Secretary Acosta to consider,” explained Anderson.

    Anderson emphasized, however, NAFA is indifferent as to what method is used by the Trump administration to delay the rule. “To us, what is important is the administration take back control of this issue so the President’s agenda does not get undermined by that June 9th implementation date.”
  3. DHK

    DHK Well-Known Member

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    The DOL said that two provisions — one expanding the definition of who is a fiduciary and another establishing impartial conduct standards — would become applicable when the delay ends on June 9.

    The agency said that it would continue its review until Jan. 1, the final implementation date for the rule.

    In guidance Monday night, the agency said that it would not enforce the rule during the delay.

    "During the phased implementation period ending on January 1, 2018, the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions," the Field Assistance Bulletin states.

    In addition to Mr. Acosta's oped and bulletin, the agency released on a new set of frequently asked questions related to the transition period from June 9 to January 1, 2018.

    So... they're going to keep reviewing the ruling, but not ENFORCE it until January 1, 2018... but companies still have to comply with it on June 9th.


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