Labor Department seeks delay of Obama investment adviser rule

Labor Department seeks delay of Obama investment adviser rule
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The Labor Department is seeking an 18-month delay of an Obama-era rule for investment advisers, according to court documents filed Wednesday.

In response to a lawsuit over the rule, agency officials told the court they have asked the Office of Management and Budget (OMB) to delay implementing the rule until July 2019.

The rule places tougher standards on financial advisers, creating a legal requirement that they act in the best interests of their clients. The rule requires advisers to tell clients when they get a commission for selling certain investment products. It is intended to prevent advisers from hiding conflicts of interest that could hurt each client’s bottom line. The rule was set to go into effect in in January 2018.

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Business lobbying groups and the investment industry fiercely oppose the rule issued in 2016 under former President Obama, arguing it would drive up the cost of financial advice and push many Americans out of the investment market. They have challenged the rule in court.

But progressive lawmakers and consumer watchdogs have defended the rule, which is prized by Sen. Elizabeth WarrenElizabeth Ann WarrenWarren: Trump is a 'racist bully' Poll: Oprah would outperform Warren, Harris against Trump in California Democrats continue to dismiss positive impacts of tax reform MORE (D-Mass.).

Labor Secretary Alexander AcostaRene (Alex) Alexander AcostaInterstate compacts aren't the right way to fix occupational licensing laws The Hill's 12:30 Report Lobbying world MORE oversaw a review of the rule but decided earlier this year that he had no legal basis to delay or amend the rule on his own.

Investment advisers had been bracing for the rule’s implementation but could get a reprieve from the OMB.