Over 90 million workers can now add digital assets to their 401(k) retirement plans.
New rules ban banks from denying services based on politics or religion.
Regulators must review and stop biased banking practices against lawful customers.
President Donald Trump signed two executive orders on August 7, significantly impacting Americans' financial options. One order allows over 90 million private-sector workers to include alternative assets, such as cryptocurrencies, in their 401(k) retirement plans.
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This change aims to give workers broader investment choices beyond traditional mutual funds. By expanding access to digital assets, the administration hopes to improve portfolio diversification and long-term returns for millions of Americans.
The executive order tasks the Department of Labor with reviewing its fiduciary duty guidelines under ERISA. It also requires coordination with the Treasury and the Securities and Exchange Commission (SEC) to update related regulations.
The SEC must revise rules to improve access to alternative assets in defined-contribution plans. This move addresses a long-standing limitation where many private-sector workers lacked access to these investment options.
Effort to Prevent Banking Discrimination Based on Beliefs
The second executive order targets banking discrimination which prohibits financial institutions from denying services based on an individual’s political views, religious beliefs, or lawful business activities. These restrictions often led to account closures or denial of services without legal justification.
The order requires federal banking regulators to eliminate guidelines that encourage politicized debanking. It instructs them to review financial institutions for past or current policies promoting these practices. Regulators must take corrective actions, including fines or consent decrees, where necessary. The Small Business Administration is also directed to ensure banks reinstate clients who lost services due to these reasons.
Addressing Past Cases of Biased Financial Practices
The administration cited examples where banks refused services tied to political events or affiliations. Some banks allegedly declined payment processing for events associated with specific political groups. Other cases involved flagging customers for transactions with certain retailers or using politically charged terms.
The administration aims to create a fairer banking system by addressing these issues. Trump also calls for a comprehensive strategy to prevent such discrimination in the future. The approach includes potential legislative solutions to solidify protections against politicized banking actions.
Opening Doors for Private-Sector Workers
Previously, access to alternative assets within retirement accounts was mainly limited to government employees and some institutional investors. The new order helps bridge this gap for private-sector workers. This will level the playing field between the public and the private sectors and open the markets to various investment opportunities.
The move is part of a wider strategy of integrating digital assets into mainstream financial planning. The initiative is in line with existing efforts to modernize retirement investing and improve financial inclusion.
