“Middle class economics means that Americans should be able toretire with dignity after a lifetime of hard work. But loopholes inthe retirement advice rules have allowed some brokers and otheradvisers to recommend products that put their own profits ahead oftheir clients' best interest, hurting millions of America's workersand their families.”

– U.S. Department ofLabor

According to the U.S. Department of Labor, back door payments, hidden fees, badretirement investments with high costs and low returns, and lossesof $17 billion a year to consumers are the justifications for aproposed fiduciary rule. In short, the rule redefines who andwhat meets the definition of a fiduciary, and requires thefiduciary be held to a “best interest” standard as opposed to a“suitability” standard. While that definition has garnered muchsupport, the remainder of the new proposed rule is so long and socomplex that some members of Congress on both sides of the aisleare asking for a complete do-over.

More than a dozen membersof Congress asked the DOL to immediately withdraw the proposalon the grounds that it would reduce access to investment optionsand increase costs for those saving for retirement, cutting offvital financial advice for many low- to middle-income families andsmall business owners – the very people the DOL said needprotection the most.

Other membersof Congress hailed the proposed rule, stating it was time toget rid of the “outdated” version implemented 40 years ago.

As the four-day hearing draws near, however, there are somegroups who fall somewhere in the middle.

CUNA Mutual Group recently voiced its support for treatingconsumers with a “best interest” standard, but also said it isassessing the rule's potential business and compliance impacts onbehalf of its credit union customers.

Kevin Thompson, vice president and associate general counsel forCUNA Mutual Group, said the proposed rule, while well-intentioned,is overreaching and unworkable.

“We are not against a fiduciary standard and we are not againstbeing held to a standard where it says you have to put yourcustomer's interest before your own,” Thompson said. “We supportand we try to conduct ourselves with integrity, and we're here tosupport credit unions and credit union members. That's not adifficult or foreign concept.”

The problem, he said, is that the proposed rule was written byan agency that likely has gotten into an industry it does not fullyunderstand.

“Some of the information they're saying you need to provide,literally doesn't exist,” he said. “I want to be in compliance butif this info is not attainable, what do I do?”

One of the proposed regulations in the rule is the requirementto report all fees, which does not apply to products that have aspread, such as share certificates. In other regulations, thedealer or broker must report all costs going forward, but currentfederal regulations prevent the prediction of future income orfees. The proposed regulations would force companies to break atleast one federal regulation to follow another, he said.

Thompson said he will carefully watch the hearings, which beginAug. 10, and see what transpires.