Republican Sen. Tommy Tuberville of Alabama has introduced a new bill he is calling the Financial Freedom Act to allow Americans to add cryptocurrency to their 401(k) retirement savings plan without being hampered by regulatory guidelines.
The new bill is Tuberville’s response to the Department of Labor’s (DOL) push to potentially keep crypto out of 401(k) investment plans due to its perceived risk potential for investors. As Cointelegraph reported, the DOL said employees who choose to invest in crypto via their 401(k) could attract legal attention.
In an op-ed for CNBC on May 5, Senator Tuberville stated:
“The federal government has nothing to do with interfering with the ability of American workers to invest their 401(k) plan savings as they see fit.”
He said the DOL’s March 10 policy change against employees using brokerage windows to self-direct their income investments was “inconsistent with longstanding practice.”
NEW BILL ALARM: I just rolled out the #FinancialFreedomAct, allowing savers to invest their 401(k) funds however they see fit.
The government shouldn’t be bothered to tell pension savers how to invest their money.https://t.co/6LGtpxquOW
— Coach Tommy Tuberville (@SenTuberville) May 5, 2022
Brokerage windows allow 401(k) investors to control what investments their account invests in, rather than accepting what their employer’s broker chooses for them. The senator continued:
“The agency’s new guidance ends that tradition of economic empowerment in favor of Big Brother’s government control. Additionally, the Department of Labor’s over-the-top guidance aims to impose a massive new regulatory burden on 401(k) plan trustees by requiring them to evaluate the suitability of investments offered through a brokerage window and the investment options restrict.”
This was announced by the investment management company Fidelity Investments on April. January 1st would allow customers to add Bitcoin (BTC) to their 401(k) accounts. This prompted Democratic Senators Elizabeth Warren and Tim Smith to argue in a letter to Fidelity CEO Abigail Johnson that there might be a conflict of interest since the company has been working with crypto products since 2017. They also mentioned that crypto investments carry “significant risks of fraud, theft and loss.”
Senator Warren has been a vocal opponent of crypto investing, calling the industry a “new shadow bank” last year.
While the DOL’s new guidance doesn’t specifically name Fidelity, it does note that cryptocurrency’s abuse of the currency law could lead to the closure of trading platforms, ultimately hurting investors.
Related: Virginia County plans to put pension funds into DeFi yield farming
Senator Tuberville promised that the Financial Freedom Act would prohibit the DOL from restricting what types of investments a self-directed 401(k) retirement plan can invest in. He succinctly stated at the end of his op-ed: “The Department of Labor should not be able to limit the range or types of investments savers can choose for retirement.”
“Whether or not you believe in the long-term economic prospects of cryptocurrency, the choice of what to invest your retirement savings in should be left to you — not the government.”
So far, no other senator has expressed public support for the brand new bill. It would need to win a majority of votes in the Senate to move it to the House of Representatives for further review. Democrats currently control the Senate, making passage of the bill an uphill battle. However, Tuberville has made his point loud and clear.
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