WASHINGTON (2/17/16)--As the U.S. Department of Labor (DOL) moves closer to releasing its final fiduciary rule, the Credit Union National Association (CUNA) reiterated concerns with DOL proposals in a letter Tuesday supporting legislation to improve them. CUNA President/CEO Jim Nussle wrote to several members of Congress to support several pieces of legislation seeking to address bipartisan concerns with the proposed rule.
The letter is addressed to Sens. Roy Blunt (R-Mo.) and Mark Kirk (R-Ill.), as well as Reps. Phil Roe (R-Tenn.), Peter Roskam (R-Ill.) and Ann Wagner (R-Mo.), all of whom have introduced legislation to address problems with the DOL's proposal.
"CUNA supports the broader goal of protecting investors and encouraging all advisors to act in the investor’s best interest. However, we have concerns that the DOL's rule will, in practicality be particularly harmful to low- and middle-income working American families looking for options to save and invest," Nussle wrote. "Credit unions as part of their mission serve many of these middle class families, and we want to ensure that credit union members continue to have opportunities to learn about investment."
The Retail Investor Protection Act (S. 2497) would delay the DOL's proposal until the Securities and Exchange Commission issues a rule governing standards of conduct for brokers and dealers. CUNA believes this bill, along with its companion in the House--H.R. 1090, would provide more clarity and reduce regulatory overlap.
CUNA also supports requirements in other pieces of legislation, including the Affordable Retirement Advice Protection Act (H.R. 4293) and the Strengthening Access to Valuable Educations and Retirement Support (SAVERS) Act (S. 2505/H.R. 4294), which would require congressional approval of the DOL’s final rule.
Those bills would mandate that "no such rule or administrative position promulgated by the DOL" may become effective unless a bill or joint resolution.
The DOL's proposal would add brokers and advisors 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 hurdles.
"While many financial service providers have expressed concerns about this proposed rule, CUNA is particularly concerned about the impact it will have on credit unions because they often serve a different demographic than some of the conglomerate investment firms," Nussle wrote. "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.
"While many large investment firms only 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 their financial future," Nussle added.