WASHINGTON—With the Department of Labor (DOL) having finalized an 18-month extension of the fiduciary rule’s applicability date, CUNA has provided a list of recommendations for credit unions to follow during the extended transition time.
The rule’s amended definition of “fiduciary” became effective June 9, but fewer conditions will apply to financial institutions and advisers until July 1, 2019.
During the extended transition period (originally set to end Jan. 1, 2018) financial institutions and advisers must comply with the “impartial conduct standards.” These are consumer protection standards that ensure advisers adhere to fiduciary norms and basic standards of fair dealing. The standards specifically require advisers and financial institutions to “give prudent advice that is in retirement investors’ best interest, charge no more than reasonable compensation and avoid misleading statements,” CUNA explained.
According to the DOL, the extension of the transition period will give the department time to consider comments, as well as the criteria set forth in President Donald Trump’s Feb. 3 memorandum, including possible changes and alternatives to exemptions would be appropriate.
The DOL also announced an extension of its temporary enforcement policy to cover the 18-month extension period. Through July 1, 2019, the agency will not pursue claims against fiduciaries “working diligently and in good faith” to comply with the transition rules, CUNA explained.