(Bloomberg) – The U.S. Labor Department granted temporary permission to five banks to continue managing certain U.S. pension funds after convictions of the banks or their units, potentially allowing the banks to move beyond their legal troubles over objections by some Democratic lawmakers.
The department proposed so-called Qualified Professional Asset Manager waivers to JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank AG, Barclays Plc and UBS Group AG, according to a Federal Register document reviewed by Bloomberg News.
A one-year waiver will take effect on Monday. The Labor Department also proposed granting the banks five-year waivers, which would become effective after a 45-day comment period, just before the Trump administration is to take over the government on Jan. 20.
“We take the ongoing process very seriously and firmly believe that the information we have provided to the Department of Labor supports the granting of a continuing exemption to allow us to serve our U.S. pension plan clients without disruption to them,” Peter Stack, a spokesman for UBS, said by e-mail.
Representatives of the other banks declined to comment. A Labor Department spokesman didn’t respond to an inquiry.
The business activity covered by the waivers includes 401(k) plans and corporate pensions, among other retirement plans. Any institution or individual that manages pensions overseen by the Labor Department must seek permission to continue those operations after certain criminal convictions. The five banks were found guilty of violations that included interest-rate or currency manipulation.
Regulatory waivers have become politically fraught over the last two years, with lawmakers including Senator Elizabeth Warren, a Massachusetts Democrat, and Representative Maxine Waters, a California Democrat, pressing the Labor Department, which oversees about $8 trillion in private-sector pensions, for tougher reviews of banks accused of crimes before clearing them to continue their pension-management businesses.
The U.S. Securities and Exchange Commission, which issues its own waivers for certain securities activities, isn’t inclined to use the process as an additional enforcement tool, SEC Chair Mary Jo White said last year.
Register or login for access to this item and much more
All Employee Benefit News becomes archived within a week of it being published
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access