The United States Department of Labor on Wednesday reportedly moved to delay the compliance deadline for the controversial, Obama-era fiduciary rule by 18 months. CEI financial policy expert John Berlau praised the move.
Today, the Labor Department came to the common-sense conclusion that the compliance date of a costly part of the fiduciary rule should be delayed while the rule is under the review ordered by President Trump. This is a positive development that may reduce some of the harm the regulation is already causing in reducing middle class savers’ options for their IRAs and 401(k)s.
But to provide real certainty for savers and the professionals who serve them, the rule must be repealed by Congress or withdrawn by the agency. The Obama Labor Department should not have pushed through this rule in the first place, as the power to regulate investments was arguably vested by Congress, not in the Labor Department, but in the Securities and Exchange Commission. Hopefully, the courts, Congress, and/or Secretary of Labor Alex Acosta will restore the rule of law and ensure informed investor choice in the retirement market.
Berlau has been a critic of the fiduciary rule from the start, warning against the rule’s negative impact on middle class savers and investors and taking exception to the notion that Labor Department bureaucrats know best when it comes to investment decisions.