President Donald Trump is expected to issue this week an order directing the Department of Labor to delay its fiduciary rule, according to two attorneys familiar with the matter.
Trump appointed Edward Hugler as acting secretary of Labor on Jan. 20.
Hugler also has been serving as the acting assistant secretary of Labor for administration and management, leading the department’s presidential transition activities.
While the order issued this week by Trump will not delay the rule, it will direct Hugler to do so, according to one of the attorneys.
The confirmation hearing for Andrew Puzder, the fast-food executive picked by Trump to be the new Labor secretary, has been pushed back yet again. It had been scheduled to take place on Feb. 7, Feb, 2, Jan. 17 and Jan. 12. The Health, Education Labor & Pensions (HELP) “committee will not officially notice a confirmation hearing with Mr. Puzder until the committee has received his paperwork from the Office of Government Ethics,” according to a statement provided to ThinkAdvisor by an aide to Sen. Lamar Alexander, the committee’s chairman.
An industry official told ThinkAdvisor on Jan. 20 that the order could delay the rule’s implementation six months or a year. The first compliance deadline is April 10.
“People are confident a delay for at least a year is imminent, but not guaranteed,” the source said.
One approach DOL could take would be “a short-term delay because of the litigation surrounding the rule,” one of the attorneys said.
“The next step would be to start the regular process for a regulation to further delay the applicability date and asking for comments on the rule. The comments would be for the purpose of deciding whether to kill it or to modify it,” the attorney said.
Rep. Joe Wilson, a member of the House Committee on Education and the Workforce, introduced a bill on Jan. 6 to delay the implementation of the fiduciary rule by two years.
Sen. Elizabeth Warren, D-Mass., sent a letter on Jan. 19 to 33 financial firms asking them whether they support delaying and rolling back the rule.
The letter — which was sent to such firms as Morgan Stanley, Raymond James, Charles Schwab & Co., Fidelity, BlackRock and TD Ameritrade — came on the heels of reports that the incoming Trump administration would seek to delay the rule, Warren said.
Despite reports of the rule being delayed, broker-dealer executives speaking at the Financial Services Institute’s recent OneVoice conference in San Francisco say they’ve changed their brokerage operations in preparation for the rule, and — with it or without — commission-based business models are on their way out.
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