Chamber of Commerce, FSI, and Others Appeal Texas DOL Fiduciary Case
The U.S. Chamber of Commerce, Financial Services Institute, and seven other plaintiffs that sued to stop the Department of Labor’s fiduciary rule are appealing a Texas judge’s decision to uphold the rule.
Judge Barbara M.G. Lynn of the Northern District of Texas ruled in favor of the Labor Department on February 8th. The judge also denied a request the same day from the Justice Department to postpone the ruling in light of President Trump’s February 3rd memo instructing the DOL to review and possibly delay the regulation.
On Friday, the nine plaintiff’s in the case filed an appeal in the U.S. Court of Appeals for the Fifth Circuit.
“We remain confident in the merits and strength of our case and stand by our assertion that the Department of Labor exceeded its authority. We have long supported a best interest standard, adopted by the appropriate regulatory authority and across all individual investor accounts, not just retirement,” the plaintiffs said in a joint statement.
“This is a misguided rule that will harm retirement savers and financial services firms that provide needed assistance and options to their clients, including modest savers and small business employees. Further the ‘private right of action’ mechanism creates unwarranted litigation risk for financial advisors, who will face the threat of meritless class action lawsuits challenging their every move.”
The fiduciary rule maintains that those who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a new fiduciary standard and is scheduled to begin implementation on April 10th. Proponents of the rule believe that the regulation is necessary to eliminate conflicts of interest in retirement investment advice.
Plaintiffs in the case are the Chamber of Commerce of the United States of America; the Financial Services Institute, the Financial Services Roundtable, the Greater Irving-Las Colinas Chamber of Commerce, the Lake Houston Area Chamber of Commerce, the Insured Retirement Institute, the Lubbock Chamber of Commerce, the Securities Industry and Financial Markets Association, and the Texas Association of Business.
The fiduciary rule has survived multiple court challenges in recent months, most recently, a Kansas judge ruled in favor of the Labor Department in a case brought by Market Synergy, an insurance firm that develops fixed index annuities.
