Yes, banks may be subject to the Department of Labor (DOL) rule regarding conflicts of interest, depending on certain factors discussed below.

The rule, which begins to take effect on April 10, 2017 (with full implementation by January 2018), expands the definition of a “fiduciary” under ERISA and the Internal Revenue Code to cover anyone who receives direct or indirect compensation for providing “investment advice” to a retirement plan sponsor, plan participant, or IRA owner. Among other things, investment advice includes discussing whether to purchase or sell assets and whether and how to rollover or transfer funds to or from an IRA. Consequently, a bank that provides advice in the course of offering its retirement investment products and services, including IRA deposit products and rollovers, may be deemed to be a “fiduciary” under the rule.

The extent to which this rule will apply to ordinary IRA-related activities of banks and their employees, such as opening or rolling over IRA accounts, remains an open question. There are some limited exceptions in the DOL rule, but the scope of their applicability has not yet been resolved.

For more information about the new rule, visit the Department of Labor’s “Conflict of Interest Final Rule” webpage (which includes several fact sheets, FAQs, a chart and more).

For resources related to our guidance, please see:

• Department of Labor Final Rule, 81 Federal Register 21147, (“This amendment and partial revocation is applicable to transactions occurring on or after April 10, 2017.”)

• ERISA Regulations, 29 CFR 2510.3-21(a)(1) (“Such person provides to a plan, plan fiduciary, plan participant or beneficiary, IRA, or IRA owner the following types of advice for a fee or other compensation, direct or indirect: . . . recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made”)