Immediately following the November 8th election, PRI released a Policy Brief describing potential impacts to the Department of Labor (DOL) Fiduciary Rule. This second brief contains updated information, as the situation and our understanding, continues to evolve.
The opportunity to overturn this specific Rule through the Congressional Review Act (CRA) is not available. Congress used this streamlined legislative process earlier this year and the resolution was vetoed by President Obama. The same procedure may not be repeated in the next Congress.
The Rule can be suspended by the Trump Administration immediately after inauguration day, January 20th, by exercising the President’s emergency authority to place a hold on new rules that are not yet “applicable.” Even though the DOL Rule was effective in June 2016, the new Administration can use its emergency rulemaking authority to push back the actual compliance deadlines of April 10th and January 1st on the basis that Financial Institutions need more time to comply. This delay can be accomplished on an expedited basis by the President, even if there is not a DOL secretary in place.
If the implementation dates for the DOL Fiduciary Rule are delayed by Presidential directive, that could allow the courts time for additional review before the Rule is applicable. Alternatively, the Trump-appointed DOL officials and Department of Justice could elect to discontinue defending the cases that are now pending. However, it would be difficult for the new Administration to simply ignore the Rule, given its high profile. Even if the new Administration attempted that action, it seems likely that the Rule’s supporters would be willing to ask the courts to require the new Administration to move forward with implementation. Read More.