Home Alts News Chamber of Commerce, FSI, and Others Seek Injunction on DOL Fiduciary Rule

Chamber of Commerce, FSI, and Others Seek Injunction on DOL Fiduciary Rule

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The U.S. Chamber of Commerce, Financial Services Institute, and other plaintiffs that sued to stop the Department of Labor’s fiduciary rule filed an emergency injunction in a Texas federal court to block the rule from taking effect while the groups are appealing the case.

Judge Barbara M.G. Lynn of the Northern District of Texas ruled in favor of the Labor Department on February 8th and denied a same-day request from the Justice Department to postpone the ruling in light of President Trump’s February 3rd memo instructing the DOL to review and possibly delay the regulation.

The fiduciary rule attempts to reduce conflicts of interest in retirement investment advice and redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974. According to the DOL fiduciary rule, all who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a “fiduciary” standard.

The DOL issued a notice earlier this month proposing an extension of the April 10th applicability date for an additional 60 days pending their review. On Friday, the department issued a temporary enforcement memorandum due to concerns expressed by financial services institutions about the uncertainty surrounding the proposed rule delay.

“The [DOL] may be unable to finalize its rulemaking before the beginning of April,” the Chamber added. “In the meantime, industry participants will have no choice but to continue to sink extensive resources into developing their compliance capabilities—and continue to incur irreversible financial costs and operational disruptions. Moreover, a 60-day extension is unlikely to be long enough for this litigation to run its course.”

The American Council of Life Insurers and the National Association of Insurance and Financial Advisors also filed a similar injunction request.

The plaintiffs in the case are asking for a ruling by Monday, March 20th.

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