WASHINGTON—Credit union brokerage offerings could be negatively affected by a proposal the Department of Labor is considering, according to CUNA.
Elizabeth Eurgubian, deputy chief advocacy officer for regulatory and executive branch relations and senior counsel, has sent a comment letter addressing the DoL’s proposed rule defining who is a fiduciary of an employee benefit plan under ERISA (Employee Retirement Income Security Act of 1974).
“We feel that credit union members and consumers deserve the best possible service with seeking info about retirement plans or IRA distribution, but we think it is important to have rules that encourage and promote retirement savings rather than kill the ability of credit unions and other financial institutions to provide those products and services,” she said.
Eurgubian explained that for the majority of credit unions offering brokerage services, compliance with the DoL proposal will not sit at the CU level, “because many credit unions offering these services have arrangements with third-party brokers that clearly outline the duties and responsibilities of each party in the arrangement.”
However there are some “some rare exceptions,” she said, where credit unions are directly impacted.
“In particular our comment letter asks the Department of Labor to analyze how it ordinarily tailors the definition of investment advice to ensure that credit union employees who are only tangentially involved in providing investment services are not also included in the rules,” Eurgubian said. “And we also urged the Department of Labor to further consider how the barriers created by strict rules in this area can negatively impact consumers’ access to retirement and other investment services, particularly for low-net-worth members who may have fewer opportunities to participate in these programs.”