Federal Court Vacates Biden-Era Fiduciary Rule
A federal district court has officially vacated the Biden administration’s U.S. Department of Labor 2024 Retirement Security Rule, effectively striking down a regulation that sought to reclassify a broad swath of financial professionals as fiduciaries.
The court’s order and final judgment, issued today, also vacates several related amendments to prohibited transaction exemptions, including those affecting insurance agents and broker-dealers.
The decision followed a strategic shift by the U.S. Department of Justice under the Trump administration, which chose to end the government’s defense of the rule last year. That followed an earlier move by the administration in November 2025 to abandon an appeal of a court-ordered stay on the rule’s implementation.
The appeal sought to overturn rulings from two federal district courts in Texas (the Northern and Eastern Districts) that had issued nationwide stays, blocking the rule from taking effect in July 2024.
The Insured Retirement Institute, part of the financial industry coalition that challenged the regulation, welcomed the decision. The coalition had argued the DOL exceeded its regulatory authority under the Employee Retirement Income Security Act, or ERISA.
“Consumers no longer face the threat of losing access to their choice of professional financial guidance or retirement products due to a poorly crafted, unnecessary Department of Labor regulation,” said Wayne Chopus, president and CEO of IRI.
Industry groups argued that the 2024 rule mirrored a failed 2016 attempt to impose a universal fiduciary standard. That earlier rule was invalidated in 2018 by the U.S. Court of Appeals for the Fifth Circuit after being deemed “arbitrary and capricious.”
Opponents of the rule cited a 2017 Deloitte study, which found that the 2016 regulation caused more than 10 million small retirement account owners – representing $900 billion in savings – to lose access to their preferred financial professionals.
The Securities Industry and Financial Markets Association and Financial Services Institute issued a joint statement: “The 2024 rule was materially indistinguishable from a 2016 DOL rule that was struck down by the Fifth Circuit in 2018. … This decision is a win for investors because the unlawful expansion of the definition of a ‘fiduciary’ would have jeopardized investors’ access to advice and education.”
The IRI maintains that the 2024 rule was redundant due to significant enhancements in federal and state consumer protection laws since 2018. Financial professionals are regulated under a framework that includes the SEC’s Regulation Best Interest, or Reg BI, and the National Association of Insurance Commissioners’ best interest model. According to IRI, all 50 states have adopted a best interest regulation.
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