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This week CUNA sent an additional letter to the Department of Labor (DOL) about its four-day public hearing for the proposed regulation defining a “fiduciary” of an employee benefit plan under the Employee Retirement Income Security Act of 1974 (ERISA), which adds brokers and advisers providing advice to Individual Retirement Accounts (IRA) to the definition.
In the letter, CUNA thanked the DOL for holding four days of hearings to listen to additional commentary about its proposed rule. However, CUNA urged the DOL to consider the concerns voiced by several participants of the hearing. Specifically, CUNA urged the DOL to engage in additional analysis about the impact the proposed rule would have on the ability of working-class families to participate in retirement and savings plans. As participants at the hearing noted, the rule in its current form is overly complicated, and will likely have the effect of limiting opportunities for education about retirement and savings plans.
CUNA’s letter outlined the specific concerns about the impact this rule could have on credit unions and credit union members. It outlined some of the ways credit union be impacted or covered by the rule as a result of the relationship with broker dealers offering investment products. CUNA reiterated that the DOL must 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.
The letter also points out that many participants at the DOL hearing shared the concern that middle-class families may have the most to lose in the proposed rule. In its current form, the DOL’s rule could make it more difficult for credit unions or other financial institutions to serve the needs of this demographic. Which is problematic since larger conglomerate investment firms are often only interested in serving the needs of high net worth clients, rather than everyday working families.
CUNA also noted that other participants at the hearing shared concerns about regulatory overlap, and that both the Financial Industry Regulatory Authority and the Securities and Exchange Commission expressed concerns about regulatory overlap as well in their comment.
The letter also noted the considerable interest in the outcome of the rule as shown by the four days of hearings, the volume of additional information and written testimony submitted after the regular comment period, and the scrutiny Congress has placed on this proposed rule through both Congressional hearings and in formal letters. CUNA argues that the strong opposition, fears voiced, and the unanswered questions posed about the proposed rule must be more closely examined and addressed before the agency can move forward with a rulemaking.
CUNA had previously filed a comment letter with the DOL about this rule, and sent a letter of support for a Congressional hearing examining this issue. CUNA will continue to follow discussions about this rule at both the DOL and in Congress.
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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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