Meanwhile, NAFA asks judge to delay Dec. 8 oral argument, while Thrivent wins some relief from anti-arbitration rules under BICE
The Labor Department will likely be cleared in three weeks to officially delay the full implementation of its fiduciary rule, Labor Secretary Alexander Acosta told a federal court in Minnesota on Thursday in a court filing.
“Typically administrative actions such as these take three weeks from the time of review by [the Office of Management and Budget] to be published as final,” Labor told the court handling Thrivent Financial for Lutherans’ case against the Labor Department over the fiduciary rule.
Meanwhile, the National Association for Fixed Annuities asked the U.S. Court of Appeals for the D.C. Circuit on Monday to delay the Dec. 8 oral arguments in NAFA’s appeal over a federal court’s denial of its bid to block the fiduciary rule.
On Wednesday, Labor filed with the OMB the official 18-month delay of its fiduciary rule.
Pam Heinrich, NAFA’s general counsel and director of government affairs, told ThinkAdvisor on Monday that NAFA asked for a delay in the Dec. 8 oral arguments because “We feel that in light of the uncertainly surrounding the proposed delay rule and the uncertainty regarding any outcome in the litigation in the other circuits, and for judicial economy we could wait till we have a little more clarity on the issues affecting NAFA’s appeal.”
NAFA did not ask the court to cancel the hearing.
Heinrich explained that NAFA and others are still awaiting a decision in the 5th U.S. Circuit Court of Appeals case against Labor’s fiduciary rule. That case was brought by nine plaintiffs, which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute.
“Court watchers had anticipated a decision already” given that the oral arguments in that case took place on July 31, Heinrich said. “A decision in that circuit could very well effect the issues before the D.C. Circuit.”
The judge presiding over the Thrivent case in Minnesota granted on Friday a preliminary injunction in favor of Thrivent, which has been fighting to halt the anti-arbitration clause set out in the rule’s best-interest contract exemption.
The injunction ensures that, at least until the litigation is concluded, Thrivent won’t face enforcement actions or excise taxes for noncompliance with the BIC. The firm has argued that the anti-arbitration rule would harm its business.
“The Court finds that Thrivent has sufficiently demonstrated the threat of irreparable harm, both now and in the future,” Judge Susan Richard Nelson wrote.
“While monetary loss alone does not warrant injunctive relief, the current state of regulatory limbo threatens Thrivent with harm that cannot be remedied monetarily,” Nelson said. “In order to comply with the anti-arbitration condition’s applicability date, Thrivent must take actions now that involve changes to its business model. In addition to the expenditure of time and money that these changes necessitate, undertaking such changes may irreparably disadvantage Thrivent against its competitors and with respect to its members.”