Looks like it’s a sorry day to be one of Trump’s cronies. President Trump claimed sweeping changes need to occur with the Dodd-Frank financial reform law “because, frankly, I have so many people, friends of mine, who have nice businesses who can’t borrow money. They just can’t get any money because the banks just won’t let them borrow, because of the rules and regulations in Dodd-Frank.”
A U.S. federal judge, Chief Judge Barbara Lynn for the U.S. District Court for the Northern District of Texas, slammed the gavel down on that idea and upheld the Obama-era rule designed to avoid conflicts of interests when brokers give retirement advice.
This may be a setback for the Trump administration’s efforts to scale back Dodd-Frank regulation. The 81-page ruling came days after Trump ordered the Labor Department to review the “fiduciary” rule — a move possibly designed to delay or kill regulation.
This is the second time a federal district court has upheld the fiduciary rule. A third court rejected the implementation.
The Labor Department’s “fiduciary” rule requires brokers to put their clients’ best interests first when advising them about individual retirement accounts or 401(k) retirement plans.
Consumer advocates and retirement non-profit groups respect it but the financial services sector, which would arguably benefit from changing it, says it’s just too costly.
Much like everything else in this Presidency, everyone got mad.
The U.S. Chamber of Commerce, the Financial Services Institute, the Financial Services Roundtable, the Insured Retirement Institute and the Securities Industry and Financial Markets Association issued a joint statement stating they would “pursue all of our available options to see that this rule is rescinded” in Labor Department in the Dallas federal court.
“The Department of Labor is continuing to follow the president’s memorandum and is exploring options to delay the applicability date,” said Labor Department spokeswoman Jillian Rogers.
The case could still be appealed to a higher court.
In the meantime, they must follow the rules: put clients’ best interests first when advising them about individual retirement accounts or 401(k) retirement plans.
Pad their wallet, not your own.
At least until you overturn it in court.