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House Approves Provision to Block DOL Fiduciary Rule
Thursday, October 29, 2015 6:40 AM

The U.S. House approved a bill that would stop the Department of Labor (DOL) from finalizing its proposed fiduciary rule until the Securities and Exchange Commission (SEC) acts on the issue. The vote was 245-186.

The House provision to block the DOL rule had strong backing from Credit Union National Association, which had urged lawmakers to take action on H.R. 1090 and had also detailed credit union concerns regarding the DOL's plan several times with the agency.

CUNA Chief Advocacy Officer Ryan Donovan said after the late Tuesday vote that CUNA appreciates the House action. “CUNA is very pleased that our advocacy efforts on this issue have paid off, and we will continue to support a more narrowly tailored rule that will assure American families of all means can receive information about saving for retirement and planning for their future.”

The DOL’s proposal would expand the definition of investment advice, and CUNA is concerned that it could sweep in employees of financial institutions. CUNA has noted that while, in most instances, compliance with the DOL’s rule should not sit at the credit union level, CUNA has concerns that if credit unions have relationships with third-party brokers, or share employees with them, credit union employees could be covered by the rule.

CUNA further cautions that compliance burdens for those who qualify as “fiduciaries” are significant, and small and medium-size credit unions could be hesitant to engage in any activity that would result in those burdens.