DOL Must Follow Law

Can't change "fiduciary" definition without giving regulated entities due process to respond

WASHINGTON – The American Securities Association (ASA) today sent a letter to Department of Labor Secretary Walsh expressing its concern over the Department’s recent attempts to change its rules regarding the “fiduciary” definition without following the notice-and-comment requirements of the Administrative Procedure Act (APA).

“The Department’s rules governing who is and is not considered a ‘fiduciary’ are incredibly important to ASA and its members,” ASA CEO Chris Iacovella wrote in the letter. “ASA is deeply concerned the Department is attempting to change its rules before it finishes (or even starts) the notice-and-comment process. We will not be deprived of our due process rights by the Department.”

In the letter, ASA outlined how the Department is seeking to change the law without following APA notice and comment requirements, by “repeatedly taking informal actions outside of the notice-and-comment process to impose changes on the regulated community.” “In recent months, the Department has given new ‘guidance’ through speeches, an extensive FAQ, and other ‘informal’ regulatory actions. Not only has this caused confusion and uncertainty, but it is not in line with the APA’s procedural requirements.”

ASA also cited several court cases in its call for the Department to stop regulating through informal guidance and start the notice-and-comment process. “Courts regularly invalidate attempts, like the Department’s here, to regulate without notice and comment,” Iacovella wrote. “If the Department continues to change its rules without notice and comment, it may provoke similar challenges.”

To read the full letter, click here.

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