U.S. Sen. Bill Cassidy, M.D. (R-LA) and U.S. Rep. Virginia Foxx (R-NC) are urging the Department of Labor (DOL) to cease any further action to amend the definition of an investment advice fiduciary.
The lawmakers contend that there are multiple conflicting positions by the DOL on the fiduciary rule and said it has caused damage for American savers.
“Over the last two years, the Department has espoused at least three separate positions on what it means to be an investment advice fiduciary. By failing to articulate itself consistently, the Department has created unnecessary instability for retirement plans, retirees, and savers,” Cassidy and Foxx wrote in a letter to DOL Acting Secretary Julie Su. “As Biden’s DOL continues to change its stance in this area, we remind the Department of its attempt to promulgate a definition of fiduciary under ERISA section 3(21) in 2016 (the “2016 Fiduciary Rule”). This ill-conceived and overreaching rule was decisively vacated by the U.S. Court of Appeals for the Fifth Circuit, and it should serve as a cautionary example.”
Cassidy is the ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, while Foxx chairs the House Education and the Workforce Committee.
“The Department’s misguided efforts to revise the definition of investment advice fiduciary have created confusion in the marketplace and unwarranted compliance expenses. For example, a recent opinion by the U.S. District Court for the Southern District of New York criticized the Department for its shifting interpretations on fiduciary investment advice.[4] Specifically, the Court stated, ‘How, then, should the Court interpret the investment advice fiduciary provisions in light of DOL’s shifting interpretations? There is no DOL interpretation binding on this court.’ Clearly, DOL’s shifting interpretations led the court to disregard DOL guidance altogether,” the lawmakers added.
They concluded with a request that the DOL cease further action on this rulemaking.