A consumer protection rule that had been delayed by Trump is set to go through

AP Photo/Manuel Balce Ceneta

Labor secretary Alexander Acosta.

The US Labor Department will implement its fiduciary rule on June 9 with no further delays, marking a short-term win for consumer protection advocates.

The department’s rule, which requires brokers offering retirement investment advice to act in the best interest of their customers, has been heavily criticized by Republicans and Wall Street amid concerns it may make investment advice too costly.

Consumer protection groups have long advocated for the rule, however. Conflicted financial advice costs retirement savers about $17 billion a year, the Obama administration estimated in a 2015 report.

The rule has faced a rocky time becoming effective, with President Trump last month delaying its enactment date, originally April 10, for 60 days. Trump has also ordered a review of the rule, which set in motion a potential repeal.

Acosta, in an opinion piece posted Monday night in the Wall Street Journal, said there was “no principled legal basis to change the June 9 date while we seek public input.”

The rule goes into partial effect on June 9, with full implementation on January 1, 2018.

U.S. President Donald Trump speaks about the apparent attack in Manchester, England, before his remarks alongside Palestinian President Mahmoud Abbas after their meeting at the Presidential Palace in the West Bank city of Bethlehem May 23, 2017. REUTERS/Jonathan Ernst

Thomson Reuters

President Trump.

Calling the fiduciary rule a “controversial regulation,” Acosta said while courts have upheld the rule as consistent with Congress’ delegated authority, it may not align with Trump’s “deregulatory goals”.

He also said the department was seeking “public comment” on how to revise the rule, leaving open a possibility of repealing the rule in future. Acosta also said that he hoped the Securities and Exchange Commission will be a “full participant” in designing the fiduciary rule.

“These are signs of positive movement for advisers and active managers despite industry disappointment that Labor failed to kill the rule,” Cowen and Co. analyst Jaret Seiberg said in a client note.

Wall Street firms may still find a win of sorts, despite that the rule’s implementation date was not blocked.

“This surprising development is a near-term negative for an industry that had expected more immediate regulatory relief, but all indications are that this rule will ultimately be relaxed,” Compass Point said in a May 23 research note. “We maintain our view that the likeliest outcome for the fiduciary rule is a revamped construct that lessens the associated legal liability and softens the treatment of variable and indexed annuities.”