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Trump Labor Department Moves to Delay Fiduciary Rule Implementation

The U.S. Department of Labor is acting to delay the implementation of its controversial fiduciary rule on financial advice for 180 days and seek public comment on the rule, per a Reuters report citing unnamed sources.

The move comes on the heels of Texas federal judge Barbara M.G. Lynn’s ruling in favor of the Labor Department on Wednesday in a case brought by multiple plaintiffs, including the U.S. Chamber of Commerce, against the fiduciary rule. Thus far, federal courts have ruled in favor of the DOL in all three cases decided on the matter.

Despite the setbacks in the federal courts to opponents of the fiduciary rule, President Donald Trump last week set in motion a reversal of course to delay implementation, and many believe, kill the rule entirely.

According to the Reuters sources, the DOL has apparently issued two separate documents to the Office of Management and Budget for approval, one of which proposes to delay the rule’s effective date for 180 days. That proposal has a comment period as short as 15 days, after which the rule’s initial effectiveness date of April 10, 2017 would be delayed for six months. The second document would reportedly initiate a new round of public comment on the rule.

The contentious battle over the DOL fiduciary rule began in 2010 during the Obama administration, which withdrew the initial proposal the following year following withering criticism from the financial services sector. It was reintroduced in 2015 and made final in April 2016, despite continuing criticism from the industry.

Critics claim that the rule would introduce liability that would essentially end access to financial advice by retirement saviors of modest means, who could not afford to pay directly for professional financial advice. Proponents argue that the rule would provide valuable safeguards to those very same investors.

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