OMB Concludes Review of Dept. of Labor’s Controversial Fiduciary Rule
The White House Office of Management and Budget has concluded its review of the Department of Labor’s fiduciary rule. Industry officials expect release of the final rule by DOL as early as next week.
Although the official review is complete – the major step before the rule is published in the Federal Register – OMB is still scheduled to meet with stakeholder groups through April 15.
Officially listed as “Retirement Security Rule: Definition of an Investment Advice Fiduciary,” 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 has concluded its part gives some industry stakeholders and policymakers concern.
“OMB’s swift conclusion in its review of this fiduciary rule gives rise to serious questions as to whether the agency has extended due consideration to stakeholder input and allowed their views to be fully heard and accounted for in this process,” said Rep. Virginia Foxx, R-N.C., Education and the Workforce Committee chairwoman.
The Insured Retirement Institute, back in March, urged President Biden and OMB to reject what they consider the harmful policies embedded in the proposed rule.
“If the President and OMB fail to stop this proposal, Congress must act to protect retirement savers and ensure the benefits of the bipartisan SECURE Act and the SECURE 2.0 Act are not in any way jeopardized by this rule,” said Wayne Chopus, IRI president and chief executive officer.
In partnership with the Financial Services Institute – another opponent of the rule – Oxford Economics analyzed the potential impact in a study using data from independent financial service firms. It determined that the fiduciary rule would result in significant costs, impose undue burdens, and adversely affect investors’ ability to access professional financial advice, products, and services.
Proponents of the bill, however, have pressed OMB to be swift. In an April 8 letter, 55 House Democrats asked DOL, OMB, and the Administrator of the Office of Information and Regulatory Affairs to “expedite the review process” of DOL’s Retirement Security Rule.
The rule, the lawmakers wrote, “will strengthen critically needed guardrails and protect working families and retirees from conflicted financial advice by self-serving financial professionals regarding employee-sponsored retirement plans.”
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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