DOL’s proposed fiduciary duty rule could have negative impact on credit unions
The Frances Perkins Department of Labor Building
Ahead of today’s hearing to examine potential regulatory overreach by the Department of Labor (DOL), America’s Credit Unions President/CEO Jim Nussle wrote to a House on Education and Workforce subcommittee to provide the credit union perspective on the DOL’s proposed rulemaking redefining who is an investment advice fiduciary for purposes of 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 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.”
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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