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President Trump, Congress and the Fiduciary Rule

Posted by James M. Carlson
Jan 08 2017

President Trump, Congress and the Fiduciary Rule

On Friday February 3, 2017 President Trump issued a presidential memorandum on the Fiduciary duty rule. This memorandum is directed to the Secretary of Labor. President Trump has nominated Andrew Puzder who is presently the CEO of the company that owns the Hardees and Carl's Jr. companies. His confirmation hearing was initially scheduled for this week, but it has been postponed until late February or early March.

The Secretary of Labor is to determine if the Fiduciary rules may adversely affect the ability of Americans to gain access to retirement information and financial advice. If so, then the DOL is to start the process of revising and possibly repealing the rule by publishing a new rule for notice and comment.

This Presidential memorandum does not immediately repeal or suspend the new fiduciary rule. Some of the new DOL rules are in effect now and the new definition of fiduciary goes into effect on April 10, 2017. The complete BICE rules do not go into effect until January 1, 2018. There is not stated a suspension period. Some TV, radio and web news accounts had mentioned a suspension of the rule for a 60-90 time per period. Link for Presidential Memorandum on Fiduciary Duty Rule

Unfortunately, financial institutions and financial representatives must comply with the new DOL rules until they are modified.

Although it appears Congress could have repealed this regulation by use of the Congressional Review Act, Congress chose not to do so. In an email furnished in January we at CWF had stated it was subject to being repealed. This was incorrect.

CWF's suggestion is, within the next 3- 9 months the Republican Congress should pass a new fiduciary law and President Trump should sign it. Congress and not the DOL should create new laws. The Fiduciary regulations are much too complicated and the costs far exceed the benefits. Your financial Institutions should communicate with your Congressional representatives.

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