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Recent news stories have made it clear that the Department of Labor
(DOL) is moving forward with finalization of its fiduciary rule, and we’ve
heard that it has been sent to the Office of Management and Budget (OMB) for
final review. The Wall
Street Journal reported, “While a review of a major rule like this
typically takes 90 days, industry officials and consumer advocates expect the
budget office to finish the process in 60 days or less. That will allow the
Labor Department to present the final rule to the public at the end of March or
the beginning of April. Congress also is given 60 days to review the rule,
which carries an eight-month implementation period.” However, this rule may be challenged
in court and under the Congressional Review Act.
We’ve been urging the DOL since it proposed this rule to
consider how it could detrimentally impact credit union members, and credit
unions who offer investment services. In July, we filed
a comment letter that urged the DOL to analyze how it can more narrowly
tailor the 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. We also urged the DOL to further consider how the
barriers created by creating strict rules in this area could negatively impact
consumers’ access to retirement and other investment services, particularly for
lower net-worth credit union members who may have fewer opportunities to
participate in retirement and savings plans.
The DOL held a four-day long set of hearings to discuss this
proposal after the comment period closed, and we sent an additional
letter in response. The letter pointed out that many participants at the
DOL hearing shared our concern that middle-class families may have the most to
lose from the proposed rule, which could make it more difficult for credit
unions or other financial institutions to serve the needs of this demographic.
In addition to our outreach efforts to the DOL, we urged Members
of Congress to pass legislation which would alleviate regulatory overlap
and require better collaboration with the Securities and Exchange Commission. We
support H.R. 1090, the Retail Investor Protection Act, which passed the House.
This legislation would prevent the DOL from implementing its fiduciary rule. We
had hoped that this legislation would be included in last year’s Omnibus
funding bill, but ultimately it did not make it in the final package. President
Obama has also issued a veto threat against it.
And just this week, we outlined our concerns with this rule
to NCUA when President/CEO Nussle sent
a letter to Chairman Matz about problems credit unions could face as a
result of this rule. The letter stated, “CUNA is particularly concerned about
the impact this proposed rule will have on credit unions because they often
serve a different demographic of investors than some of the conglomerate
investment firms. When providing the opportunity for investment services to
their members, credit unions aim to help families of all means receive
information about saving for retirement and planning for their future.”
We will be closely following the progress of this rule, and
will engage in additional advocacy efforts to assure credit unions are not
harmed by it.
Champion for the Credit Union Movement
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.
© 2018 Credit Union National Association
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