EXCLUSIVE: House Republicans on Friday unveiled a new bill that would prevent the Labor Department from restricting investment options for employees in self-directed retirement accounts, and would allow Americans to add cryptocurrency to their 401 k plans if they choose to do so.
A rebuttal to the latest political flashpoint: Cryptocurrency and whether Fidelity Investment can offer a retirement plan with digital currency later this year, is what the Financial Freedom Act, introduced by Rep. Byron Donalds, R-Fla.
Fidelity announced last month that it planned to offer bitcoin as an investment option in its 401 k plans by the end of the year, sparking alarm from many Democratic lawmakers, including Sen. Elizabeth Warren, who expressed concern that clients could be exposed to a risky and speculative gamble. Republicans have risen to the defense of Fidelity, accusing Democrats of governmental overreach and infringing on Americans' free-market rights. The legislation is about financial and investor freedom, not only about cryptocurrencies, according to GOP lawmakers.
In a far-reaching and sweeping effort to centralize power in Washington, the Biden administration is trying to dictate how the American people invest their hard-earned money, Donalds said in a statement. This administration, as well as any other government entity, does not have the authority to direct the financial future of America s investors. The Labor Department warned against such a move, suggesting that if companies invest their employees' contributions plans in digital assets, including Bitcoins, they could be investigated. The DOL Employee Benefits Security Administration said fiduciaries must exercise extreme care before investing in cryptocurrencies in the March 10 notice.
In an April 12 letter, Fidelity objected to that guidance, saying that the DOL didn't provide information on how fiduciaries can fulfill their fiduciary duties in assessing cryptocurrencies. The investment company will allow customers to put 20% of their savings into bitcoins, and other cryptocurrencies will likely be added later.
More than 23,000 companies use Fidelity for their retirement plans.
The House Financial Freedom Act is a companion bill to legislation introduced by Sen. Tommy Tuberville, R-Ala.
The government has no business standing in the way of retirement savers who want to make their own investment choices, according to Tuberville. When you earn your paycheck, how you invest your money should be your decision. Our legislation makes sure that is the case.