Submitted via email: e-ORI@dol.gov

September 21, 2015

Office of Regulations and Interpretations

Employee Benefits Security Administration

Attn: Conflict of Interest Rule

Room N-5655 

United States Department of Labor

200 Constitution Avenue NW

Washington, DC 20210

RE: Conflict of Interest Proposed Rule, Related Exemptions and Regulatory Impact 

Analysis Hearing

Dear Sir or Madam:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the 

transcript from the United States Department of Labor’s (DOL) hearing concerning 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. CUNA represents America’s credit 

unions and their more than 100 million members. 

CUNA thanks the DOL for holding four days of hearings to listen to additional commentary

about its proposed rule. We appreciate that DOL officials provided explanations and answered 

questions during the hearing, and that the agency reopened the timeframe to consider comments 

on the hearing transcript. This thorough consideration about the consequences of this proposed

rule is important for all stakeholders impacted by it. CUNA urges the DOL to consider the 

concerns voiced by several participants of the hearing. Specifically, we urge the DOL to engage 

in additional analysis about the impact the proposed rule would have on the ability of workingclass 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.

As CUNA noted in our previous comments, we have specific concerns about the impact this rule 

could have on credit unions and their members even though in most instances compliance with 

this DOL proposal should not sit at the credit union level. Credit unions offering investment 

services have arrangements with third party brokers in which they clearly outline the duties and 

responsibilities of each party in the arrangement. The third party offering retirement or IRA

services in most situations will be responsible for their own compliance with applicable laws and 

compliance standards, and is usually selling their products directly to members. However, 

questions remain about whether the proposed rule could sweep in credit unions and their 

employees because of their interactions with these third parties. Such interactions may occur 
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because credit unions are required to conduct due diligence to ensure any third party arrangement 

and practice has proper controls in place, and they must have reasonable belief that the third parties’

practices are compliant. As we noted in our comment letter, there is also a question of whether 

credit unions could be directly swept into this rule if they share employees with a broker dealer.

Since the rule has such a broad scope, we have concerns that credit unions could be swept into 

some of the newly proposed requirements. This is concerning because the compliance burdens 

for those who will qualify as ERISA fiduciaries are significant, and small or medium size credit 

unions could be hesitant to engage in any activity that may require compliance with this complex 

and expansive proposed rule. This could preclude credit unions from offering investment 

services through a third party. Accordingly, 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. 

There continues to be significant deliberation about the DOL’s proposed rule. This is evident 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. Despite valiant efforts by the DOL to 

create rules which will improve the consumer experience when investing, it is clear 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. 

Discouraging Credit Unions from Offering Investment Services is Detrimental to 

Consumers

At the hearing, other organizations representing financial institutions posed similar questions as 

those raised by CUNA about how this proposed rule could affect customers and members of 

financial institutions. While the impact on financial institutions and their members is only a 

small part of the debate over this rule, it is significant for the many Americans who look to these 

institutions for support in learning about retirement and savings options. We urge the DOL to 

further study how credit unions and other financial institutions will be impacted by the rule, and 

to consider reissuing a more narrowly tailored proposed rule, which is less detrimental to

members and customers.

As we noted in our comment letter, we are particularly concerned about the impact this proposed 

rule will have on credit unions because they often serve a different demographic than some of the 

conglomerate investment firms. When providing investment services to their members, credit 

unions aim to help American families of all means receive information about saving for 

retirement and planning for their future. While many large investment firms seek high net-worth 

clients, credit unions seek to provide services to their members in all financial situations to make 

it easier for these individuals to map out financial plans. 

CUNA strongly agrees that credit union members, and all consumers, deserve the best possible 

service when seeking information about retirement plans or IRA distributions. However, it is 

important to have rules that encourage and promote retirement savings—rather than potentially 
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impede the ability of credit unions, or other financial institutions, to provide these products and 

services. As illustrated throughout the four days of hearings, the DOL’s proposed rule is full of 

complexities and unworkable solutions that must be resolved to assure that the very people this 

rule is intended to help are not inadvertently harmed.

As outlined in detail in our comment letter, CUNA encourages DOL to examine how the 

following could negatively affect consumers’ access to retirement and other investment services:

 The overly broad consideration of what is considered “investment advice” 

 The overly prescriptive requirements surrounding what constitutes compensation

 The problematic “sellers carve-out” 

 How “the Best Interest Contract Exemption” will work at financial institutions

Regulatory Overlap is Problematic for Credit Unions

Many participants at the hearing and commenters shared CUNA’s concerns about the regulatory 

overlap that is likely to occur if the proposed rule is finalized in its current form. This concern 

was even voiced by other regulators at both the Financial Industry Regulatory Authority 

(FINRA) and the Securities and Exchange Commission (SEC) in their comment letters. As 

CUNA previously noted, credit unions are supervised by the National Credit Union 

Administration 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 in 

this area is unnecessarily duplicative and could be burdensome to credit unions who are already 

facing a multitude of regulatory hurdles.

The responsibilities associated with being an ERISA fiduciary would require expensive and 

time-consuming compliance training for credit unions, during a time when they are facing an 

unprecedented number of regulatory burdens. We believe it is important that credit unions are 

able to offer a full range of products and services to their members, including products to help 

families save for retirement and other purposes, without being swept into a rule aimed at

financial advisors. Any ambiguity and uncertainty in this area could cause financial institutions 

to exit or not join this market. 

The reduction of any unnecessary regulatory hurdles, either intended or unintended, is important 

for the livelihood of credit unions. Thank you for the opportunity to comment on the hearing 

transcript. If you have any questions concerning our letter, please feel free to contact me.

Sincerely,

Leah Dempsey

Senior Director of Advocacy & Counsel

Ldempsey@cuna.coop

202-508-3636