U.S. District Judge Jeremy Kernodle, of the Eastern District of Texas, has frozen the new fiduciary rules, by issuing a preliminary injunction to freeze the Department of Labor’s (DOL’s) Retirement Security Rule, which is supposed to take effect on Sept. 23.
The preliminary injunction was requested by the Federation of Americans for Consumer Choice, which filed suit, along with several independent insurance agents.
Kernodle said the new Fiduciary Rule suffers from many of the same problems as the DOL’s previous attempts to expand the meaning of fiduciary under ERISA, stating that the Fifth Circuit vacated an earlier rule because it “conflict[ed] with the plain text of [ERISA],” was “inconsistent with the entirety of ERISA’s ‘fiduciary’ definition,” and unreasonably treated numerous financial services providers “in tandem with ERISA employer-sponsored plan fiduciaries.”
It’s just a preliminary injunction and we will see how this plays out.
