WASHINGTON—In response to the Labor Department's recent decision to delay its fiduciary rule until July 1, 2019, New York is considering a similar rule to require brokers in the state to only consider their clients' best interests when recommending retirement savings products.
The rule, proposed by New York's Department of Financial Services, is similar to the Labor Department's fiduciary rule, but covers a wider range of retirement planning services. The state's rule is open for public comment for 60 days, NAFCU reported.
Although the Labor Department's fiduciary rule technically went into effect in June 2017, the department adopted a temporary enforcement policy so it will not pursue claims against investment advice fiduciaries who are "working diligently and in good faith to comply with the fiduciary duty rule and exemptions" until July 1, 2019, stated NAFCU, which supported the Labor Department's delay in order to limit the potential negative impacts on credit unions.
During the extended transition period, financial institutions and advisers, as they are defined in the best interest contract and principal transactions exemptions, would only need to comply with the impartial conduct standards to satisfy the exemptions' requirements, NAFCU said.
The Labor Department is also involved in a few lawsuits over the rule.
NAFCU has previously aired concerns about how the Labor Department's rule’s indirect costs would affect credit unions, and has urged the department to revoke the rule completely or, at the very least, exempt credit unions.