WASHINGTON—Concerns over a Department of Labor proposal has led to concerns over an “unfair burden” on credit unions, according to America’s Credit Unions.
The proposal, which would redefine who is an investment advice fiduciary as part of the Employee Retirement Income Security Act. as the focus of a congressional hearing this week.
The proposal “casts a wide net that unfairly burdens credit union activity with complex requirements and potential litigation risk,” wrote ACU President and CEO Jim Nussle in a letter to the committee. The letter said the term “recommendation” is too broad and could include “general advice and explanation of investment-related financial products, such as IRAs, provided by credit union employees.”
May No Longer Be ‘Worthwhile’
“In light of such possible interpretations, credit unions may decide that it is no longer worthwhile to recommend an investment advisory credit union service organization (CUSO) to a member to either set up an IRA or create an employee welfare benefit plan (if the member is a business),” wrote Nussle. “This is concerning since credit unions and credit unions employees have long provided financial products, services, and support to their members.”
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