That could mean some big changes for credit unions.

"The biggest impact will be to commission-based products, which is still the majority of products that most credit unions invest in products to sell," Peter Vonk, executive vice president of business services and chief compliance officer at CUSO Financial Services, said. "This could be your mutual funds, your variable annuities, your fixed annuities."

Vonk said it's more common for CUSO Financial Services, which has about 450 advisors in approximately 200 credit unions, to sell commission-based products under the suitability standard than as fiduciaries. CUSO Financial Services has $25 billion in assets under management, Vonk said, and about 60% of that is retirement assets.

The proposed regulations are in part predicated on research asserting that conflicts of interest cost investors. A recent Council of Economic Advisors study, for example, stated that conflicts of interest cost investors about 1% a year, or $17 billion on IRA assets.

"A retiree who receives conflicted advice when rolling over a 401(k) balance to an IRA at retirement will lose an estimated 12% of the value of his or her savings if drawn down over 30 years," the study said.

Underperformance associated with conflicts of interest in the mutual funds segment could cost IRA investors more than $210 billion over the next 10 years and nearly $500 billion over the next 20 years, according to the rule.

Those are big dollars, yet IRAs are still largely the domain of small investors. About 28% of all U.S. households have one, and the median value was $50,000 in 2013, according to a regulatory impact analysis. Among IRA-owning households with less than $10,000 in their IRAs, 47% are held at commercial banks, 32% are at brokerages, and 16% are at credit unions, the CEA said. More than half of all IRA investors are 55 or older, the study also said.

According to the Department of Labor, advice regarding IRAs is difficult to control, however. "Existing loopholes mean that many retirement advisors do not consider themselves fiduciaries," it said. "As a result, consumers have limited, if any, recourse under ERISA and the Internal Revenue Code if their retirement advisor recommends products that are in the advisor's interest rather than the consumer's."

The proposed rules do allow advisors to continue to receive variable commissions, loads and other "conflicted compensation" if they meet certain conditions, however. Some of the most notable are in the rule's "best interest contract exemption." To qualify, advisors must, among other things, enter into contracts formally acknowledging their fiduciary status with customers, have policies and procedures in place to mitigate conflicts of interest and create webpages disclosing fees and the compensation arrangements.

"In simple terms, it is somewhat unworkable for firms in our industry as currently written," Vonk said. "We'll have to produce a website that lists all of the approved products that we make available to retirement clients, which is thousands of products. We'll have to disclose all of the revenue generated by those products to the firm and to the advisor. There are a lot of challenges with that, because we don't necessarily know what an advisor will be paid, because they're on variable pay comp grids."

Significant sales retraining will have to occur as well, he said.

The proposed rule would also treat recommendations on the selection of investment managers or advisors as fiduciary investment advice, including recommendations of persons to perform asset management services or to make investment recommendations. Recommendations on distributions, investments and rollovers would count, though providing general education about such things typically doesn't make a person a fiduciary, the rule noted. Because they too receive tax preferences, Health Savings Accounts, Archer Medical Savings Accounts and Coverdell Education Savings Accounts would also fall under the proposed regulations, according to the proposed rules. The DOL also asked for comment on whether firms should be allowed to receive conflicted payments if the products they're recommending are the lowest-fee ones in a product class.

Vonk said he hopes the final standard at least allows advisors to hold off on presenting contracts until the member is ready to take action on an investment.

"We've never had a process where a client would need to enter into a contract prior to beginning to talk about investments," he added. "I can see some members of credit unions saying, 'What is all this? You want me to enter into a contract before we can even talk about what I'm looking for?' That could be a difficult conversation."

Not surprisingly, the reaction to the proposed rules has been mixed.

"Average Americans who scrimp and save to afford an independent and secure retirement should be able to trust that the financial professionals they turn to for advice will act in their best interests," Consumer Federation of America Director of Investor Protection Barbara Roper said. "But current rules contain loopholes that enable many financial firms and advisors to put their own financial interests ahead of the interests of their customers. With billions of dollars in excess fees at stake, the industry has shown it will stop at nothing to defeat this rule."

"Because of the increased liability risks and compliance costs, firms have indicated that the safer course of action would be to migrate most commission-based accounts to fee-based accounts that in most cases are exempt from the rule," Kenneth Bentsen, Jr., president/CEO of the Securities Industry and Financial Markets Association, which released its own rule proposal on June 3, remarked. "However, as stated fee-based accounts cost the investor more than commission brokerage accounts. And, because of the higher service and compliance costs associated with fee-based accounts, most firms limit such accounts to higher balanced accounts, thus potentially leaving millions with no option for advice or guidance."

The National Association of Insurance and Financial Advisors has also called the proposed rules unworkable.

"The regulations would certainly reduce the availability of services and advice as some advisors would either shift their practices away from the retirement sector or would drop middle- and lower-market clients who would not be able to afford the increased costs," NAIFA stated. "Consumers may find themselves unable to continue working with advisors they know and trust and may be unable to receive advice in a number of common, yet complicated, retirement-investment situations."

"I have to believe there will be significant changes to this proposal, that that will not be the outcome," Vonk told CU Times. "Because obviously that is not how credit unions operate."