WASHINGTON (3/2/16)--The U.S. Department of Labor’s (DOL) “fiduciary” rule threatens to harm low- and middle-class retirement savers by increasing the cost of financial advice, according to a report from a Senate committee. The Senate Committee on Homeland Security and Government Affairs report, titled “The Labor Department’s Fiduciary Rule: How a Flawed Process Could Hurt Retirement Savers” raises many concerns shared by the Credit Union National Association (CUNA) regarding the rule.
“The Labor Department’s rule threatens to harm low- and middle-income Americans by increasing the cost of investment advice,” said Sen. Ron Johnson (R-Wis.), chair of the committee. “Saving for retirement is important, and investing can be a complex process. Ensuring Americans’ access to investment advice will help them plan for retirement. Americans saving their hard-earned money shouldn’t face additional hurdles imposed by Washington.”
The DOL’s rule would add brokers and advisers to the definition of "fiduciary" of an employee benefit plan. CUNA has concerns that this could potentially negatively affect credit unions that offer investment services through arrangements with third-party brokers if credit unions are swept into overly burdensome compliance rules.
According to the Senate report, DOL “disregarded concerns and recommendations from career, nonpartisan, professional staff at the Securities and Exchange Commission, regulatory experts at the Office of Information and Regulatory Affairs within the Office of Management and Budget and Treasury Department officials.”
CUNA has shared concerns with members of Congress and legislators, and recently supported legislation that would seek improvements in the rule.
CUNA’s Removing Barriers blog looked deeper into the report’s findings.