President Trump Directs DOL to Consider Rescission or Revision of Fiduciary Rule
MESSAGE FROM NAFA
NAFA applauds President Donald Trump for beginning the process of stopping the Department of Labor’s fiduciary rule.
As most of you are aware, on Friday February 3, 2017 the White House took executive action which received widespread coverage. President Trump signed a memorandum directing the Department to review the rule to determine whether it may adversely affect the ability of Americans to access retirement products and information, cause dislocations in the financial services marketplace, and cause increased litigation that will drive up prices of retirement products and services. It also gave the Department clearance to move forward to rescind or revise the rule as appropriate and as consistent with law.
In a press briefing discussing the burdens of the fiduciary duty rule, White House Press Secretary Sean Spicer echoed many of the arguments that NAFA has been articulating since the rule was introduced in draft form in 2015, namely that the effect of the rule will be to limit American retirees’ access to critical financial services and that the Department overreached its regulatory authority in promulgating the rule. As NAFA has repeatedly stated, “the rule is a solution in search of a problem.”
Numerous articles have been published in relation to the White House memorandum, including a Wall Street Journal article quoting NAFA Executive Director, Chip Anderson:
The insurance industry has also bucked against the rule, as it would effectively put out of business certain annuities sellers. Chip Anderson, executive director for the National Association for Fixed Annuities, a trade association, said more than 50% of the annuities industry would be “severely affected,” with potentially half of the industry’s jobs at stake. The association and other critics have contended that the Labor Department overstepped its authority in crafting the regulation and that it would have an “immediate and devastating effect” on its industry.
In addition to this critical development, Judge Barbara Lynn who is presiding over the legal challenge to the rule in the U.S. District Court for the Northern District of Texas issued a notice on Thursday, February 2nd stating that she intends to issue her decision on the case no later than this Friday, February 10th. Meanwhile, NAFA’s own legal challenge continues as we appeal the Moss decision in the DC Court of Appeals.
NAFA will continue to monitor all developments regarding the fiduciary rule and work to achieve a positive outcome. We hope for greater clarity on the status of the rule by the end of the week and will relay further information to NAFA members as we have it. We very much appreciate your continued engagement with and support of NAFA’s efforts to defeat this rule.