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WASHINGTON, DC – The American Securities Association (ASA) today issued the following statement from President and CEO Chris Iacovella on the U.S. Department of Labor’s (DOL) proposal to amend the definition of an investment advice fiduciary under the Employee Retirement Income Security Act:
“The Biden Administration’s attempt to justify new rules for financial advisors as stopping “junk fees” is purposefully designed to mislead to the American people. ASA has always been a strong supporter of standards – such as the SEC’s Reg BI - that promote financial inclusion, make it easier for Americans to save for retirement, and protect investors.
“Similar to the Obama Administration’s DOL fiduciary rule, the Biden Administration’s fiduciary rule lacks any empirical and legal basis to be adopted as a final rule. Earlier this year, the U.S. District Court for the Southern District of New York criticized the DOL for its shifting interpretations on fiduciary investment advice, after the Middle District of Florida struck down the DOL’s attempt to subject a financial advisor's one-time recommendation of rollover retirement assets to ERISA fiduciary duties. The courts have spoken on this policy.
“Today’s official action by the DOL also raises significant legal questions. Rather than follow the letter of the law, the DOL has chosen to blatantly violate the legal authority under which Acting Secretary Julie Su may perform duties related to official actions, including rulemakings, under the Federal Vacancies Reform Act and the Appointments Clause of the Constitution. Given that she has been “Acting” Secretary for over 210 days, this proposal and any other official action approved by her at the DOL will be the subject of strict legal scrutiny.
“The DOL needs to cease any further action on this rulemaking because no American deserves to be locked out of retirement options or have their financial security threatened for political gain.”
In February 2022, ASA sued the U.S. Department of Labor in federal court in the Middle District of Florida for violating the Administrative Procedure Act (APA).
In May 2023, the U.S. Department of Justice voluntarily dismissed its appeal after the DOL dropped its appeal following the Middle District Court of Florida striking down its proposal to change existing rules about retirement advice without a formal rulemaking.
Read the Department of Labor release here.
Visit a Department of Labor website on the Proposed Rule here.
Read a White House Fact Sheet here.
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About the American Securities Association
American Securities Association, based in Washington, DC, represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.