Back in early May, Senator Tommy Tuberville (R-AL) introduced The Financial Freedom Act of 2022 in the United States Senate, legislation seeking to prohibit the Department of Labor (DOL) from “issuing a regulation or guidance that limits the type of investments that self-directed 401k account investors can choose through a brokerage window.”
On May 20, Congressman Byron Donalds (R-FL) introduced an identical House companion bill.
“In a far-reaching and sweeping endeavor to centralize power in Washington, the Biden administration is now attempting to dictate how the American people invest their hard-earned money,” said Rep. Donalds. “This administration, as well as any other government entity, lacks the authority to direct the financial future of America’s investors. This unprecedented maneuver infringes on the founding principles of economic liberty and free markets. To stand up against this gross example of government overreach, I am proud to support Senator Tuberville’s effort in the Senate to protect American investors from unelected Washington bureaucrats.”
The Financial Freedom Act was introduced as a reaction to a U.S. Department of Labor (DOL) compliance report dated March 10 that raised objections to the inclusion of cryptocurrencies in 401(k) retirement plans. That report warned that the department’s Employee Benefits Security Administration “expects to conduct an investigative program aimed at plans that offer participant investments in cryptocurrencies and related products, and to take appropriate action to protect the interests of plan participants and beneficiaries with respect to these investments.”
The DOL report elicited a response from financial services giant Fidelity Investments objecting to what it saw as unclear language and positions that strayed from the intent of the law that created the 401(k) program. It requested the DOL clarify the report or withdraw it. Two weeks later, Fidelity joined a number of smaller financial services firms in offering Bitcoin to 401k plan holders.
That move elicited a concerned response from the Department of Labor’s Ali Khawar, acting assistant secretary of the Employee Benefits Security Administration (EBSA), who indicated he and the EBSA staff would speak with Fidelity about the department’s concerns.
The Republican-backed legislation faces a steep uphill battle in both chambers on Capitol Hill, with no known support from Democrats on what has emerged as a partisan issue.
“The Biden administration has taken it upon itself to dictate what assets are viewed worthy of retirement investment, taking the decision away from individual investors by issuing regulatory guidance targeting cryptocurrency. This is government overreach at its finest.”
Sen. Tommy Tuberville (R-AL)
“Folks work for decades, live within their means, and invest wisely so they can retire comfortably,” said Senator Tuberville. “Now, the Biden administration has taken it upon itself to dictate what assets are viewed worthy of retirement investment, taking the decision away from individual investors by issuing regulatory guidance targeting cryptocurrency. This is government overreach at its finest. The government has no business standing in the way of retirement savers who want to make their own investment choices. When you’ve earned your paycheck, how you invest your money should be your decision. Our legislation makes sure that is the case.”
A press release announcing the companion bill from Rep. Donalds also included statements of support from a variety of cryptocurrency advocates.
“We’re proud to support the Financial Freedom Act of 2022, providing consumers greater choice in their retirement savings, including cryptocurrency and digital assets. Crypto allows individuals to take control of their financial future, and we will continue working with policymakers to support legislation that empowers this innovative technology and allows all Americans to benefit from it,” said Kristin Smith, Executive Director, Blockchain Association.
“We are pleased with Congressman Donalds’ introduction of the House-companion of the Financial Freedom Act of 2022. It is crucial that individual investors have the ability to access the investment vehicles and financial markets that enable them to build a strong financial future,” said Cody Carbone, Chamber of Digital Commerce. “Individual investors are increasingly savvy, and with growing interest and adoption of alternative investment vehicles, including appropriate digital assets, this legislation would ensure that all investors with individual, self-directed investment accounts can choose investment options to diversify their investment portfolio.”
“When planning for their retirement, Americans deserve to have a say in where and how their income is invested. The Biden Administration, which is currently overseeing its own self-inflicted economic crisis, believes they know better and are attempting to restrict Americans from investing their personal 401ks in digital assets,” said Garrett Bess, VP of Heritage Action. “We applaud Congressman Donalds’ efforts to ensure Americans retain control over their personal finances and have the ability to invest their hard earned income as they see fit.”
Original co-sponsors of the legislation include: Representatives Warren Davidson (R-OH), Young Kim (R-CA), David Schweikert (R-AZ), and Tom Emmer (R-MN).
This legislation can be read in its entirety here.
SEE ALSO:
• Republican Bill Promotes ‘Financial Freedom’ (Bitcoin) in 401ks
• Fidelity to Offer Bitcoin in 401ks
• Sens. Warren, Smith Question Fidelity Bitcoin-in-401k Plan
• DOL ‘Gravely Concerned’ About Fidelity 401k Bitcoin Announcement
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
