WASHINGTON—The Labor Department was again urged to provide a credit union exemption from the broad scope of the fiduciary rule that addresses whether certain exemptions should be adopted for investments in bank deposit products in a comment letter from NAFCU.
The Labor Department issued a request for input on new and amended administrative class exemptions that were published in conjunction with its fiduciary rule—known as prohibited transaction exemptions, or PTEs. NAFCU has told the Labor Department that it supports a one-year delay in the applicability dates for new requirements contained in the fiduciary rule's PTEs and best interest contract (BIC) exemption.
"NAFCU and our members are concerned that the fiduciary rule casts a wide net that unfairly burdens credit union activity with complex requirements and potential litigation risk," wrote Andrew Morris, NAFCU's regulatory affairs counsel. "Accordingly, NAFCU asks that the department consider exemptions that would relieve credit unions of substantial uncertainty when providing members with basic information about certain investment products."
Morris explained that the Labor Department should exempt recommendations relating to bank deposit investments and should also exempt recommendations concerning the selection of a credit union service organization.
"NAFCU believes that there is little merit in requiring credit unions to comply with a complex fiduciary duty requirement when available data does not suggest that the 'conflicts' envisioned by the final rule have ever detracted from credit unions' high standards of member service," Morris concluded.
The Labor Department's fiduciary rule went into effect June 9, with full implementation scheduled for Jan. 1.