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Advocacy Groups Blast Regulatory Review Process of DOL Fiduciary Rule

The Insured Retirement Institute and 10 other organizations jointly sent a letter expressing concerns about the regulatory process for the U.S. Department of Labor’s proposed “Retirement Security Rule: Definition of an Investment Advice Fiduciary.”

The letter was addressed to: Julie Su, U.S. secretary of labor; Shalanda Young, director, the U.S. Office of Management and Budget; and Richard Revesz, administrator at the Office of Information and Regulatory Affairs.

As The DI Wire reported last week, OMB recently concluded its review of the Department of Labor’s fiduciary rule, and industry officials expect release of the final rule by DOL as early as this week. Although the official review is complete – the major step before the rule is published in the Federal Register – OMB had still been scheduled to meet with stakeholder groups through yesterday.

DOL filed its rule at OMB on March 9 and submitted for its final review in mid-March. As OMB reviews typically take up to 90 days, the speed at which OMB concluded its part gave some industry stakeholders and policymakers concern.

The letter outlined what it refers to as devastating ramifications of the proposed lawmaking on low- and middle-income individuals, “deepening anxiety and widespread retirement insecurity.” It declared questions related to DOL’s process regarding their interest in public input. This included OIRA’s “clear disregard for public input by the timing of their approval of the final rule on April 10, mere hours after some meetings and before other scheduled meetings, or what OIRA termed ‘listening sessions.’”

Regarding the affected organizations:

  • The approval was issued mere hours after OIRA’s separate meetings with the Financial Services Institute, the American Bankers Association, and the National Association of Insurance & Financial Advisors.
  • The approval was issued before a scheduled meeting on April 12 with the Alternative & Direct Investment Securities Association, whose meeting was canceled without notice.
  • The approval was issued before a scheduled meeting on April 15 with a coalition run by Davis & Harman, whose meeting was also canceled without notice.
  • The approval was issued a mere day after meetings with Finseca, the U.S. Chamber of Commerce, and the American Council of Life Insurers.
  • The approval was issued a mere two days after meetings with the Investment Company Institute and IRI.
  • The approval was issued a mere five days after meetings with SIFMA and the National Association for Fixed Annuities.

The letter concludes, “For the sake of the regulatory process’ integrity and to prevent and protect harm from accruing to millions of America’s workers and retirees, we ask you to reconsider this rush to judgment and allow for further input and constructive dialogue before this rule is finalized. The consequences of this rule are too significant to be overlooked.”

As previously reported by The DI Wire, the new DOL rule, first proposed on Halloween 2023, seeks to amend the definition of an investment advice fiduciary under the Employee Retirement Income Security Act with the reported goal of helping to ensure investment advice providers deliver recommendations that are in the investor’s best interest, especially in the area of retirement savings.

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