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In a 2-1 ruling, the 5th Circuit Court of Appeals last week struck down the Labor Department's fiduciary rule. NAFCU had previously aired concerns about how the rule's indirect costs would affect credit unions, and has urged the department to revoke the rule completely or, at the very least, exempt credit unions.

The rule was challenged in a lawsuit filed by the U.S. Chamber of Commerce and eight other business and financial groups.

The rule would have imposed a fiduciary standard of care on broker-dealers and investment advisers that provide investment advice to retirement plan investors. Even though credit unions are prohibited from offering investment advice that would render them "investment advisers" under state or federal securities law, the rule would have affected investment advisory services provided through vendors and credit union service organizations (CUSO). Therefore, a credit union that offers investment advisory services through a third-party arrangement or through a CUSO would have been impacted.

Last year, the Labor Department delayed implementation of three fiduciary rule exemption changes from Jan. 1, 2018, to July 1, 2019. The extensions applied to the rule's "best interest contract" and "principal transactions" exemptions.

This court decision is at odds with the 10th Circuit Court of Appeals, which ruled in favor of the Labor Department last week. According to reports and given the split on this case, it could escalate to the Supreme Court.

Congress has also weighed in on the fiduciary rule. The House-passed regulatory relief package - the Financial CHOICE Act - would repeal the rule. The recently passed Senate package leaves the rule in place.