WASHINGTON – The Department of Labor (DOL) should delay its fiduciary rule by at least 180 days, CUNA wrote in a letter to the agency Thursday. In the letter, CUNA also called for additional efforts and research to ensure that credit union members are not harmed by unintended consequences of overly broad rules.
A Feb. 3 presidential memo indicated that there could be changes to the rule. It was also widely reported that the DOL sent a request for a 180-day delay to the rule, however, the proposed rule only seeks a 60-day delay.
The rule expands the definition of who is a “fiduciary” of an employee benefit plan, adding brokers and advisers providing advice to individual retirement accounts. While CUNA supports the goal of protecting investors, it has concerns about possible impacts on credit union members’ ability to receive services to invest and save.
“Consumers benefits when credit unions can offer a full range of products and services to their members, including products to help families save for retirement and other purposes,” Leah Dempsey Senior Director of Advocacy and Counsel wrote. “Any unnecessary compliance burdens or uncertainty in this area for credit unions is not helpful to members. Accordingly, we support a delay of at least 180 days to the Fiduciary rule. Furthermore, we support efforts for additional research and legal and economic analysis about how the rule will affect consumers, particularly credit union members.”
Specifically, CUNA highlighted three situations where in certain circumstances credit unions could be covered by the rule:
- Credit unions offering investment products and services through a third party. For these institutions, compliance with the rule will not be determined at the credit union level, and there are questions about whether a credit union could be held liable for the actions of a third party;
- Credit unions sharing employees with a third party, such as a credit union service organization. Credit unions sharing employees could be swept into the rule, making it less clear that a credit union employee and credit union are exempt from consideration as a fiduciary;
- Credit unions that provide information about rolling over a Retirement Plan into an IRA or other information that previously was not considered investment advice.
More information about the letter, including a link to the letter itself, can be found on CUNA’s Removing Barriers Blog.
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