WASHINGTON (10/29/15)--The U.S. House approved a bill that would stop the Department of Labor (DOL) from finalizing its proposed fiduciary rule until the Securities and Exchange Commission (SEC) acts on the issue.
The vote was 245-186.
The DOL provision had strong CUNA backing. The association had urged lawmakers to take action on H.R. 1090 and also had detailed credit union concerns regarding the DOL's plan several times with the agency.
CUNA Chief Advocacy Officer Ryan Donovan said after the late Tuesday vote that CUNA appreciates the House action. "We back the intention of protecting investors and encouraging advisers to act in an investor's best interest. Credit unions exist to serve their members, and inherent in that is acting in a member’s best interest.
"However, credit union members--all Americans--need rules that encourage and promote retirement savings, rather than potentially curb the ability of credit unions, or other financial institutions, to provide these products and services.
“CUNA is very pleased that our advocacy efforts on this issue have paid off, and we will continue to support a more narrowly tailored rule that will assure American families of all means can receive information about saving for retirement and planning for their future.”
The DOL’s proposal would expand the definition of investment advice, and CUNA is concerned that it could sweep in employees of financial institutions.
CUNA has noted that while, in most instances, compliance with the DOL’s rule should not sit at the credit union level. CUNA has concerns that if credit unions have relationships with third-party brokers, or share employees with them, credit union employees could be covered by the rule.
CUNA further cautions that compliance burdens for those who qualify as “fiduciaries” are significant, and small and medium-size credit unions could be hesitant to engage in any activity that would result in those burdens.
The next step for the Retail Investor Protection Act, which also impacts the ability of Americans to choose the financial adviser and the investment products they want, would be consideration by the Senate.