Removing Barriers Blog

Letter to NCUA on DOL Overtime and Fiduciary Rules
Posted January 27, 2016 by CUNA Advocacy

This week, we wrote a letter to NCUA Chair Matz highlighting our concerns about the DOL’s proposed rules regarding the definition of “fiduciary” and overtime pay.

Our letter urged the NCUA to encourage the DOL to analyze further the problems this rule will create, and more narrowly tailor its proposal for overtime pay to include a more reasonable percentage of the workforce. Additionally, the DOL should consider the burdens this rule could place on small credit unions and those in rural and underserved areas. 

The DOL has said it plans to finalize its fiduciary rule in the first half of 2016. The proposal would define who is a “fiduciary” of an employee benefit plan, which includes adding brokers and advisers providing advice to individual retirement accounts.
We worry that this rule could prevent credit unions from offering investment services through a third party, which is not in the best interest of credit union members or middle-class families. Its important for the DOL to more narrowly tailor the definition of ‘investment advice’ to ensure the rule does not cover interactions of credit union employees, who are only tangentially involved in providing these services.

The DOL has also said it will likely release its regulation for overtime pay this year, raising the eligibility threshold from $23,660 to $50,440.

Unfortunately, this rule does not take into consideration the significant increase in costs credit unions are already facing, and many credit union employees suddenly will be covered under this rule. The rule also does not include any regional cost-of-living adjustments, instead setting one threshold for the entire country. This approach makes the rule particularly burdensome for smaller, rural credit unions.