DOL Court Brief Indicates Potential 18-Month Delay in Fiduciary Rule Effective Date

8/15/17

The Department of Labor (DOL) issued a court brief proposing an 18-month delay in the effective date for the implementation of the remaining parts of the fiduciary rule, which defines who is a fiduciary of an employee benefit plan. This delay would give credit unions more time to resolve compliance ambiguities.

In the brief, the DOL notified the court that on Aug. 9, 2017, it had submitted to the Office of Management and Budget (OMB) proposed amendments entitled:

Extension of Transition Period and Delay of Applicability Dates From Jan. 1, 2018, to July 1, 2019; Best Interest Contract Exemption (PTE 2016-01); Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02); Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters (PTE 84-24).

Pending the approval of the OMB, the effective date would be pushed back to July 1, 2019 from the current Jan. 1, 2018 effective date.

Question of the Week

One of our members has died, and his executor wants to open a decedent account. He also wants a debit card to go with the checks. Is this acceptable?

The regulations do not prohibit a credit union from offering a debit card on a decedent account, but keep in mind the purpose of such an account.  The executor’s job is to pay the decedent’s bills and debts, after which the account will be closed.  One of the safest ways to track the transactions is to use checks.  Thus, the credit union might develop a policy that limits the kinds of services provided to decedent accounts.

Legal Briefs

Federal Reserve Board (FRB)

The FRB issued guidelines to evaluate requests for joint accounts at Federal Reserve Banks. The joint accounts are set up to facilitate settlements between depository institutions participating in private-sector payment systems.

Federal Housing Finance Agency (FHFA)

The FHFA announced the appointment of Andre D. Galeano as the new Deputy Director of the Division of Federal Home Loan Bank Regulation.

The FHFA released the Dodd-Frank Act Stress Tests Results—Severely Adverse Scenario Results report. The report provides information on possible ranges of future financial results of both Fannie Mae and Freddie Mac under severely adverse conditions.

Internal Revenue Service (IRS)

The IRS announced that it has started mailing letters to individuals with expiring TINs, urging them to renew their TINs as soon as possible, especially if they will have a tax filing requirement in 2018. ITINs with the middle digits 70, 71, 72, or 80 are set to expire at the end of 2017.

U.S. Department of Labor (DOL)

The DOL filed a brief indicating that it is proposing to extend the effective date of the Fiduciary Rule from January 2018 to July 2019.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of August 9, 2017. The last update prior to this was July 31, 2017.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance News, Compliance News.