Labor Dept. proposes 60-day delay of Obama's tough rules for brokers

Labor Dept. proposes 60-day delay of Obama's tough rules for brokers

The move is expected to at least delay application of the rule, which is supposed to take full effect April 10.

"This proposed 60-day extension of the applicability date aims to guard against this risk", the Labor Department noted, going on to say that the extension makes it possible for them to take additional step - completing its examination, implementing any necessary additional extension (s) and proposing and implementing a revocation or revision of the rule - without the rule becoming applicable beforehand.

Last month Trump had asked the department to re-examine the rule and its effects on the financial industry.

There will also be a 45-day comment period on President Donald Trump's executive memo, which directs the Labor Department to examine the rule and analyze its economic impacts.

In its call for the delay, the Labor Depatment says it will provide a 15-day comment period for observers to weigh in.

"All along we've kind of known that the rule is very likely to be amended".

The Fiduciary Rule-part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which sought to prevent the corrupt practices that led to the financial crisis of 2008-has faced delays before. That decision is now being appealed by the U.S. Chamber of Commerce and other business groups that oppose the regulation.

"The courts have repeatedly held that any delay in the rule would cause far more harm on the public than it would to the industry that's complaining about the rule", Stephen Hall, the legal director for Better Markets, told The Hill.

"Delaying the rule is imperative to avoid further client confusion and market disruption, as firms approach the drop-dead date to notify tens of millions of customers of service changes to their accounts because of the rule, ultimately making retirement savings more hard for many investors", the trade group said in a statement. Opponents of the rule have said it would have unintended consequences and force higher prices.

Micah Hauptman, financial services counsel at the Consumer Federation of America, pointed to language in the delay proposal that said it would be effective on the date of the publication of the final rule in the Federal Register, which is likely to occur in late March or early April after the DOL has reviewed comments on the delay and the Office of Management and Budget has approved it.



Other news