WASHINGTON The U.S. Labor Department this week took preliminary steps toward potentially recrafting the fiduciary rule, which requires brokers who offer retirement advice to act in their customers' best interest.
The White House's Office of Management and Budget website posted a notice by the Labor Department saying it plans to solicit information from the public and other interested parties about the rule.
Such a step marks the very early part of a formal rulemaking process. However, it does not guarantee a new rule will ultimately be crafted.
"We need that information. We need that data in order to decide how to proceed," Labor Secretary Alexander Acosta said on Wednesday, when lawmakers inquired about the rule during a routine congressional hearing on the Labor Department's budget.
The fiduciary rule has been the subject of fierce debate and contention since it was proposed during the Obama administration.
It is championed by consumer advocates and retirement non-profit groups, but has been staunchly opposed by the financial services sector, which argues it will make retirement advice too costly and harm lower-income retirees in particular.
Wall Street and other wealth managers have sought to kill it or scale it back, including by filing lawsuits against the department that have so far proven unsuccessful.
Earlier this year, President Donald Trump ordered the department to study the rule and see if it should be scrapped or rewritten.
The department temporarily halted implementation. However, portions of the rule are now slated to go into effect on June 9 without further delays.
Acosta said at the hearing on Wednesday that multiple attorneys examined the rule and could not find a legal basis for postponing its June 9 implementation.
He added that he is aware of some of the concerns about the rule, but the federal law governing rulemaking procedures requires the department to follow a proper process and weigh those concerns to see if changes are merited.
"We need the data to substantiate those concerns because the decisions have to be based on the record, or else those decisions become prejudgment," he said.
(Reporting by Robert Iafolla and Sarah N. Lynch in Washington; Editing by Paul Simao)