Trump Signs Executive Orders on Banking Policies and 401(k) Investments
On Thursday, President Donald Trump signed an executive order aimed at preventing politicized banking practices and enhancing the investment choices available for 401(k) plans for Americans.
The first order seeks to ensure equitable banking services for all, prohibiting federal regulators from endorsing policies that allow financial institutions to deny services based on political or religious beliefs, or lawful business activities. Regulatory bodies have been directed to eliminate concepts like “reputation risks” that could lead to what the order describes as “politicization or illegal removal.” Additionally, all smaller financial entities under the Small Business Administration’s jurisdiction must make reasonable efforts to assist clients who had previously been denied services for illegitimate reasons.
Treasury Secretary Scott Bessent has been assigned the responsibility of developing strategies to address further politicized de-emergence activities, and he is expected to evaluate potential legislative or regulatory remedies.
The order also mandates that federal bank regulators review past and current policies of financial institutions that may promote politicization or unlawful exclusion, and take necessary corrective actions, which may include fines.
Furthermore, regulators are required to analyze supervision and complaint data, bringing any cases of illegal religious discrimination to the Attorney General’s attention.
Trump’s second order from Thursday aims to broaden access to alternative investment options for 401(k) participants. According to the White House’s fact sheet, this order includes several specific directives:
- The Secretary of Labor is instructed to revisit the guidance on fiduciary duties related to investing in alternative assets for 401(k) and other defined contribution plans.
- The order calls for clarification from the Secretary of Labor regarding alternative assets and the associated contracting process for asset allocation funds.
- Consultation with the Secretary of the Treasury, the SEC, and other federal regulators is to be conducted to assess the need for parallel regulations that align with the order’s goals.
- The SEC is directed to facilitate access to alternative assets within defined retirement savings plans by amending relevant regulations and guidance.
This executive order was announced shortly before Trump commemorated Purple Heart Day on August 7, 2025, in an East Room event attended by more than 100 recipients.
