A Flawed Regulatory Process on DOL Fiduciary-Only Rule Marginalized Public Input

NAIFA continues efforts to discourage the Department of Labor and the administration from moving forward with its flawed fiduciary-only rule. In a letter to DOL Acting Secretary Julie A. Su, Office of Management and Budget (OMB) Director Shalanda Young, and Office of Information and Regulatory Affairs (ORIA) Administrator Richard Revesz, NAIFA and 10 other groups detailed problems with the rule's regulatory process and asked the administration to "stand up for the integrity of the regulatory process and continue the public input process, rather than finalize the fiduciary rule now."

The rulemaking process had a very short public review period and the department showed little interest in giving meaningful consideration to public input on the rule. The letter, which was also sent to 12 prominent members of Congress, points out that:

• President Biden publicly supported finalizing the rule without changes prior to a public comment period.
• The DOL's comment period for the rule was significantly shorter than the comment periods of similar proposed rules and DOL denied a request for an extended comment period.
• For the first time in recent memory, DOL scheduled its public hearing on the rule during the comment period, rather than allowing those testifying to consider other stakeholders' comments prior to their testimony.
• The DOL ignored a request from eight Democratic members of the Senate to extend the comment period.
• ORIA approved the final rule on April 10, just hours after meetings with NAIFA and two other groups expressing grave concerns with the rule and before scheduled meetings with several other stakeholders. ORIA met with other organizations opposed to the proposal very shortly before April 10.

In his testimony to ORIA, NAIFA CEO Kevin Mayeux, CAE, said: “We urge OIRA to discontinue the rulemaking until you address the filed comments related to the Proposed Rule’s significant negative impact on access to financial services professionals and determine that the Final Rule will not harm low- and middle-income savers in a manner that cannot be addressed under the current regulations.”

When ORIA nonetheless moved the rule forward, Mayeux stated: "NAIFA is disappointed that the OMB has concluded its review of the DOL’s fiduciary-only rule that will limit the options of many American consumers seeking products and assistance as they prepare for retirement. While we appreciate that NAIFA was able to present some of our concerns about the rule in a meeting with OMB’s Office of Information and Regulatory Affairs yesterday, it is unfortunate that OMB decided to advance this rule so quickly, even while OIRA still has meetings with additional stakeholders scheduled. White House officials’ lack of engagement during our meetings with them and rush to complete the OIRA review gives the impression that the administration is rubber-stamping this rehashed proposal and not considering the serious consequences it will have for the American public.

"NAIFA will continue working with our coalition partners and members of Congress as we pursue nonregulatory means of protecting American consumers from the consequences of the DOL rule,” Mayeux added.