WASHINGTON—Ahead of this week’s hearing to examine potential regulatory overreach by the Department of Labor (DOL), America’s Credit Unions told the House on Education and Workforce subcommittee there is a CU perspective on the DOL’s proposed rulemaking redefining who is an investment advice fiduciary.
The proposal is related to the Employee Retirement Income Security Act.
“We agree with the DOL that credit union members, and all consumers, deserve the best possible service when seeking information about retirement plans or Individual Retirement Account distributions,” wrote President/CEO Jim Nussle. “However, it is important to have rules that encourage and promote retirement savings – rather than potentially chill the ability of credit unions, or other financial institutions, to provide these products and services.”
‘Significantly Broader’
He noted that the NCUA has traditionally stated that federal credit unions “may not act as broker-dealers in securities or provide investment advice of the type that would render them ‘investment advisors’ under state of federal securities law.” While the DOL’s fiduciary rule covers these types of actions, Nussle explained that the proposed language also covers transactions and relationships that are significantly broader in scope.
“America’s Credit Unions and our members are concerned that the Fiduciary Duty Rule casts a wide net that unfairly burdens credit union activity with complex requirements and potential litigation risk,” added Nussle.
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