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CUNA has written a letter urging Congress to consider the impact that the U.S. Department of Labor’s (DOL) recent proposed rulemaking defining fiduciaries would have on credit unions’ ability to offer retirement savings products and services to their members.
The letter was sent Wednesday to U.S. Reps. Sean Duffy (R-Wis.), chairman of the House oversights and investigation subcommittee, and Al Green (D-Texas), ranking member of that committee.
The DOL proposed rule was the topic of a hearing held today on “Preserving Retirement Security and Investment Choices for All Americans” before the U.S. House subcommittees on oversight and investigations, and capital markets and government sponsored enterprises.
While we support the rule’s goal to protect investors and act in the investor’s best interest, the proposal is full of complexities which could limit some investment options for credit union members. We urged the subcommittee to consider whether the proposed rule could have a detrimental impact on lower- or middle-income investors, and whether the DOL should narrow its definition of “investment advice” to assure that credit union employees, who are only tangentially involved in providing investment services, are not included in the rule. The letter also noted that credit unions could be adversely affected by the rule if they share a dual employee with a third party.
Additionally, we asked Congress to consider the regulatory overlap that will affect credit unions if the rule is finalized in its current form. Federally chartered credits unions are supervised by the NCUA, and the Consumer Financial Protection Bureau if they have $10 billion or more in assets, and state-charted credit unions are regulated at the state level. Furthermore, FINRA and the SEC already require specific licenses and compliance with certain laws for registered brokers, insurance agents, and investment advisors in credit unions. Any additional oversight from the DOL in this area may be unnecessarily duplicative and burdensome to credit unions who are already facing many regulatory hurdles.
Specifically, we are pushing Congress to examine three areas for their effect on consumers’ access to retirement and other investment services:• The overly broad consideration of what is considered “investment advice”;• The overly prescriptive requirements surrounding what is compensation; and• The problematic “sellers carve-out.”
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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