On Wednesday, Alexander Acosta, Dean of Florida International University School of Law and President Trump’s nominee to lead the Department of Labor (DOL), appeared before the United States Senate’s Health, Education, Labor, and Pensions (HELP) Committee for his confirmation hearing.
A day prior to his hearing, Sen. Elizabeth Warren (D-MA) sent Dean Acosta a ridiculously self-serving 23 page letter with numerous misleading questions and inaccurate assertions on DOL’s Fiduciary Rule. As NTU has explained in the past, the Fiduciary Rule raises the standard of care for financial advisers, which will increase costs and litigation and lead to a decline in one-on-one investment advice.
Throughout the course of the hearing, Dean Acosta was pressed by a number of Democratic Senators on DOL’s proposed Fiduciary Rule and whether he supported it in its current form. Most of the pointed questioning on the Fiduciary Rule, of course, came from Sen. Warren. At issue was whether the Labor Secretary nominee agrees with President Trump’s decision to review the Fiduciary Rule.
Dean Acosta made plain that he supports President Trump’s February 3 decision to review DOL’s proposed Fiduciary Rule. Nearly a month later, in response to President Trump’s directive for DOL to undertake its assessment, the agency suggested a 60 day delay for the effective date of the rule. National Taxpayers Union (NTU) promptly submitted comments urging DOL to grant the proposed extension and suggested the agency should amend significantly or withdraw the unworkable rule.
If the preceding paragraph reads like a timeline, it is because the order of events is critical to rescuing middle-class consumers and taxpayers from a debacle that will condemn them to only be able to receive “robo-advice” on their investments and make them more reliant on shaky government retirement programs. Without the 60-day delay, the Fiduciary Rule will take effect on April 10 -- a mere 17 days from now.
Despite Sen. Warren’s protests, Dean Acosta’s decision to support the President’s directive is the right one. From a legal perspective, President Trump is the leader of the executive branch and Dean Acosta, if confirmed, will report to the President. On policy grounds, given the President’s request for DOL to perform renewed economic and legal analysis of the rule, a 60 day extension is prudent. This will give DOL sufficient time to perform its evaluation and give the financial advisory industry breathing room.
NTU continues to believe the Fiduciary Rule as currently drafted is unworkable, too expensive, and should be either amended or withdrawn entirely. We will keep taxpayers apprised about the threats posed by the Fiduciary Rule. The clock is ticking on our financial freedom.