In a notice of administrative action filed in an ongoing lawsuit with the wealth management firm Thrivent Financial, the Department of Labor said that it has submitted a proposal to the Office of Management and Budget to extend to July 1, 2019, the applicability date for certain exemptions to the fiduciary rule. The extension would apply to the best interest contract exemption, principal transactions exemption, and prohibited transaction exemption 84-24.
The rule — which greatly expands the definition of who counts as a fiduciary under the Employee Retirement Income Security act and the Internal Revenue Code — took effect on June 9, 2017, though most provisions of the exemptions had a compliance date of Jan. 1, 2018.
The delay marks a significant victory for ABA, which has long called on DOL to extend the effective date for the exemptions to allow bankers more time to comply. The announcement came just two days after ABA wrote to DOL expressing concern that the rule remains “deeply flawed in several critical areas.” The association had also submitted comments in late July reiterating its call for an extension to the Jan. 1, 2018 compliance date and requesting that DOL act expeditiously so that banks could optimize the implementation of their compliance strategies and resources.