WASHINGTON (9/29/15)--With a U.S. House Ways and Means subcommittee hearing on the Department of Labor’s fiduciary proposal coming up on Wednesday, CUNA wrote to the panel to outline concerns about how credit unions members may have fewer options for retirement or IRA services, and more confusion as result of the DOL proposed rule. The hearing follows CUNA’s request for Congress to consider the impact of the proposal.

The DOL’s proposal would expand thedefinition of investment advice. This would sweep in additional persons and entities who will have to comply as ERISA fiduciaries, likely including more employees of financial institutions. Though 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.

The CUNA letter adds 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.

“This could preclude credit unions from offering investment services through a third party, which is not in the best interest of credit union members or middle-class families,” the letter reads. “We urge Congress to examine how the DOL can more narrowly tailor the definition of “investment advice” to ensure that credit union employees, who are only tangentially involved in providing investment services are not covered by the rule.”

CUNA is particularly concerned about the impact this proposed rule would have on credit unions because they often serve a different demographic than some of the conglomerate investment firms only seeking to serve wealthy clients.

“When providing investment services to their members, credit unions aim to help American families of all means receive information about saving for retirement and planning for their future,” the letter notes. “While many large investment firms seek high net-worth clients, credit unions seek to provide services to their members in all financial situations to make it easier for these individuals to map out financial plans.”

CUNA sent comments to the DOL regarding the proposal twice, the first time during the initial comment period, and the second after the comment period was re-opened following a four-day public hearing in which speakers raised many of the concerns CUNA has.

In addition to the House Ways and Means subcommittee on oversight hearing, the DOL’s proposal will get additional Congressional scrutiny this week. A bill that would require the DOL to delay its rule until the Securities and Exchange Commission issues a rule governing standards of conduct for brokers and dealers will be marked up by the House Financial Services Committee Wednesday.

 The subcommittee hearing is scheduled to begin at 10 a.m. (ET) Wednesday, and will be streamed live.