The U.S. Department of Labor’s (DOL) fiduciary rule is being challenged by a lawsuit filed in Texas Thursday by the U.S. Chamber of Commerce and other financial advice industry groups, according to reports. The rule was finalized in April, and though it contains a number of CUNA-requested changes, concerns remain.
The DOL’s rule defines who is a “fiduciary” of an employee benefit plan, adding brokers and advisers providing advice to individual retirement accounts.
CUNA is pleased with several important modifications to the rule, but still believes the rule will add additional compliance burdens to credit union service organizations, and potentially credit unions.
According to a report in Financial Advisor IQ, the target of the lawsuit is a section of the rule which gives investors the ability to go after advisers through class-action lawsuits. Per an Investment News report, DOL’s authority to put forth the rule and whether the regulation will deny low- and moderate-income investors access to advice could also be challenged.
CUNA will be monitoring the lawsuit as it proceeds.