The chief architect of the Labor Department's fiduciary rule, Phyllis Borzi, seesa tough road ahead for the Trump administration in repealing therule.

“If the administration decides to flip it [the fiduciary rule]or make changes, they will be sued and the courts won't view thisfavorably,” Borzi, former head of Labor's Employee BenefitsSecurity Administration, said Sunday at the fi360 conference inNashville.

Borzi, who accepted the Committee for the Fiduciary Standard'sfiduciary of the year award before remarks at the event, concededthat “none of us really knows what's going to happen with the[fiduciary] rule.”

On June 9, if the rule isn't delayed further, the impartialconduct standards kick in, which means advice has to be given in aclient's “best interest, firms must charge reasonable compensationand not lie,” Borzi noted. Firms “can do it any way they want.”

A further delay beyond June 9 will create “uncertainty” thatwill be “really problematic,” Borzi said.

Blaine Aikin, fi360's CEO, agreed during his opening remarks atthe event that if there is a delay, which news reports say LaborSecretary R. Alexander Acosta is seeking, “that would be a majormistake.”

Delay, he said, “almost certainly means litigation from consumerorganizations,” resulting in “an extended period ofuncertainty.”

In comments to reporters after her remarks, Borzi said that “thecourts generally are not willing to agree to let a newadministration overturn an old administration's rulemaking with nonew evidence” that the rule is causing harm.

In assessing a repeal of the rule, “the courts are going to lookto see whether there's new evidence or whether the department didnot do a thorough job in the evidence it had before it. We have nowthree district courts who have specifically held that we did.”

Borzi said that during her last two years of the Obamaadministration, “My goal … was to make sure that we had carefullygone through all the public comments and addressed each and everyone of the public comments somewhere — in the preamble, the rule oreconomic analysis. [The Trump administration] has to matchthat.”

Repeal of the rule now is “a heavy burden,” Borzi said. “I thinksome in the industry and some at the White House thought: 'Our guywon, that's the end of the story.' I don't know that it's the endof the story in a rule with this complexity, with this much of apublic record of consideration.”

That being said, however, “Who knows — a court could doanything.”

Borzi also told reporters that “it would be wonderful” if theSecurities and Exchange Commission moved on its own fiduciary rule,but she sees the agency “even more polarized” now.

“If your goal is to have all of the people giving advice subjectto the same standard, neither of us [DOL or SEC] can do it byourselves. We have to both have similar rules,” Borzi said.

While Labor regulates the retirement space and the SECsecurities, “securities held by pension funds” are under thejurisdiction of both DOL and SEC.

Eric Marhoun, chairman of NAFA's DOL steering and litigationcommittee, who's also executive vice president and general counselfor Fidelity & Guaranty Life in Des Moines, said that “based onrecent conversations and meetings with representatives of theadministration and Congress, it is my impression that theadministration is considering all options for further delaying theDOL rule, including an interim final rule or Section 705 relief –which I believe to be the top choices for delay at this point.”

While other industry trade groups have been pushing LaborSecretary R. Alexander Acosta to adopt an interim final rule tobypass comment period restrictions, NAFA is pressing Acosta toconsider invoking a provision of the Administrative Procedures Actknown as Section 705, which allows delay of any administrativeaction that is being challenged in court.