The U.S. Chamber of Commerce has thrown its support behind a lawsuit aiming to block the Department of Labor’s (DOL) latest fiduciary rule, which significantly broadens the scope of who is considered a fiduciary under federal benefits law. The Chamber filed an amicus brief in a Texas federal court on Friday, advocating for a preliminary injunction to halt the implementation of the rule, citing increased costs for consumers and a potential rise in litigation risks.
Legal Arguments Against the DOL’s Fiduciary Expansion
In the brief, the Chamber argues that the DOL’s rule, finalized in late April, bypasses a traditional test set by Congress in 1975, under the Employee Retirement Income Security Act (ERISA), to determine fiduciary status. The rule forcibly categorizes many brokers and agents as fiduciaries, a significant shift from their previous non-fiduciary roles. The Chamber highlights that this redefinition will lead to higher compliance costs and potentially expensive class-action lawsuits against financial service providers.
