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By Sean Forbes
Jan. 29 — The Department of Labor sent its long-sought, long-fought fiduciary rule to the Office of Management and Budget for review, putting the financial industry one step away from dealing with new requirements aimed at preventing conflicts of interest in the provision of retirement investment advice.
The final rule was received by the OMB on Jan. 28, according to a posting on that agency's site. A rule review by the OMB's Office of Information and Regulatory Affairs is generally limited to 90 days, though the OMB director can extend it once for up to 30 days and the head of a rulemaking agency can extend it indefinitely. With three months for review, the final rule could be sent back to the DOL by the end of April, although it might be released even sooner.
White House press secretary Josh Earnest told reporters Jan. 29 that while he doesn't have an “exact time frame” for when the rule will be completed, “we’re working aggressively to work through the process, incorporate the input, be receptive to the feedback that we’ve received, but also put in place a regulation that’s clearly in the best interest of those workers who are trying to do the right thing by saving for their retirement.”
The proposed rule was released last April and has been the subject of multiple hearings in the House and Senate, an unprecedented four days of public hearings at the DOL in August and hundreds of thousands of comment letters.
The fight over the rule may ratchet up yet another notch. Attorneys who spoke with Bloomberg BNA in December and January said that opponents will likely challenge the rule in the courts on the merits of the DOL's regulatory impact analysis, and whether the department has proper authority to regulate individual retirement accounts .
Congress also could attempt to kill the rule, but President Barack Obama, who has championed it, is almost certain to veto any countermeasure that lands on his desk .
On Tuesday, the House Education & the Workforce Committee will consider a pair of bills, the Affordable Retirement Advice Protection Act (H.R. 4293) and the Strengthening Access to Valuable Education and Retirement Support Act (H.R. 4294), that include mechanisms to block the fiduciary rule while aiming to address the conflicts-of-interest issue.
“Look, the president has made this a priority because being able to save for retirement is part of the kind of American dream that every middle-class family aspires to,” Earnest said. The way the rules are now, “up to $17 billion each year in retirement savings is lost because some financial advisers don’t act consistent with the best interests of their clients,” he said.
The proposed rule gives the financial industry an eight-month implementation period—a deadline that could stretch in to 2017.To contact the reporter on this story: Sean Forbes in Washington at email@example.com
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