Financial Industry Once More Slams DOL's Form LM-10

Four financial trade associations on Jan. 26 again blasted a Labor Department rule requiring employers to report on small gifts to labor union leaders. In a joint comment letter they also anticipated the department would not pull back from the rule and suggested ways to mitigate its effects. "We suggest that, at a minimum, the department should engage in a separate...rulemaking, and not impose these new requirements on service providers unless that process has been completed," said the Investment Company Institute, the Investment Adviser Association, the American Council of Life Insurance and the Securities Industry Association. The letter attacks the rule on both legal and public policy grounds.

Last June financial firms, including fund companies which provide services to Taft-Hartley pension plans, were jolted to find on Labor's Web site a notice that they were covered by a new Form LM-10 requiring them to report on such benefits as dinners they gave unions--a regulatory fiat that bypassed usual rule-making procedures that allow for input from the public. Nothing industry people have been able to do since June has budged Labor. The new letter nonetheless says "it is unfair to ask the chief executive officers and chief financial officers of service providers to attest under penalty of perjury to the contents of Form LM-10 without providing clear instructions...the form...must be updated, and...the department's updating of Form LM-10 must be accomplished through notice and comment rulemaking."