A federal judge has granted the Trump administration’s request for a 60-day pause in litigation challenging the Department of Labor’s (DOL) fiduciary rule, marking another chapter in the ongoing battle over how retirement advice is regulated.
The contested rule traces back to the Biden administration, which sought to expand the fiduciary standard to cover more types of retirement advice and the professionals providing it. This effort included one-time transactions such as retirement account rollovers and annuity sales—moves that sparked significant opposition from financial firms and advisors.
The regulation faced swift legal challenges, and last July, a federal judge in Texas temporarily blocked its implementation, citing similarities to a 2016 Obama-era rule that was ultimately abandoned when the Trump administration chose not to defend it in court.
Industry experts suggest this latest iteration may meet a similar fate. “It’s highly unlikely that the DOL will push forward with defending the rule,” says Jamie Peterson, managing director at compliance consultancy Iron Road Partners. “This rule has been a political football, shifting with each administration change. The two-month stay is likely the first step toward walking away from it.”
Gina Alsdorf, an attorney at Carlton Fields in Washington, D.C., notes that the DOL’s request for more time aligns with an executive order Trump signed on his first day in office, which called for a freeze on new regulations. “Given the circumstances, it wouldn’t be surprising if the DOL allows the stay to remain in place and shifts its focus to other policy priorities,” Alsdorf wrote in an analysis of the fiduciary rule dispute.
The DOL declined to comment, referring inquiries to the Justice Department, which has yet to respond.
In a court filing earlier this month, the DOL explained that the requested stay in two pending fiduciary rule cases would provide new agency officials “sufficient time to become familiar with the issues and determine how they wish to proceed.” The filing noted that leadership transitions were still in progress, with officials onboarding and reviewing the legal landscape.
One key nominee has already made his stance clear. Daniel Aronowitz, Trump’s pick to lead the Employee Benefits Security Administration—the DOL division responsible for crafting the rule—has publicly criticized the regulation.
In a written statement last year, Aronowitz called the fiduciary rule “classic regulatory overreach.” His comments came in response to the Supreme Court’s landmark decision to overturn Chevron deference, a long-standing legal doctrine that had required courts to defer to federal agencies’ interpretations of regulations.
With Chevron deference eliminated, Aronowitz argued, the DOL’s ability to defend its fiduciary rule in court has weakened significantly. “Without Chevron, the DOL no longer has the benefit of judicial deference for its regulatory overreach,” he said.
For wealth advisors and RIAs, the potential rollback of the fiduciary rule signals a continued environment of regulatory uncertainty. While the rule’s future remains in limbo, advisors should remain vigilant about compliance expectations, particularly regarding best-interest standards under the SEC’s Regulation Best Interest (Reg BI) and existing fiduciary obligations under ERISA.
