Trump Signs Orders to Ban Politicized Debanking, Broaden 401(k) Options

By Nick Gilbertson

President Donald Trump on Thursday signed executive orders to ban politicized debanking and to broaden 401(k) investment choices for Americans.

• The first order, “Guaranteeing Fair Banking for All Americans,” prohibits federal regulators from pushing policies that enable banks and other financial institutions to deny services due to “political beliefs, religious beliefs, or lawful business activities,” a White House fact sheet on the order notes.

  Banking regulators are directed to end “reputational risk and other equivalent concepts” that foster “politicized or unlawful debanking.” Under the order, all small financial institutions that fall under the Small Business Administration’s jurisdiction will be required “to make reasonable efforts to reinstate clients and potential clients previously denied services due to unlawful debanking.”

  Treasury Secretary Scott Bessent is tasked with establishing a plan to counter additional debanking activities that are of a politicized or unlawful nature. He is instructed to weigh potential legislative or regulatory solutions.

  “The Order requires Federal banking regulators to review financial institutions for past or current policies encouraging politicized or unlawful debanking and take remedial actions, including fines or consent decrees,” the fact sheet notes. 

  “The Order further requires Federal banking regulators to review supervisory and complaint data for instances of unlawful debanking based on religion and refer such cases to the Attorney General,” it adds.

  A second order that Trump signed on Thursday is called Democratizing Access to Alternative Assets for 401(k) Investors. A White House fact sheet on the order states:

  • • The Order directs the Secretary of Labor to reexamine the Department of Labor’s guidance on a fiduciary’s duties regarding alternative asset investments in ERISA-governed 401(k) and other defined-contribution plans.
    
    
  • • The Order instructs the Secretary of Labor to clarify the Department of Labor’s position on alternative assets and the appropriate fiduciary process associated with offering asset allocation funds containing investments in alternative assets.
    
    
  • • The Order directs the Secretary of Labor to consult with the Secretary of the Treasury, the Securities and Exchange Commission, and other federal regulators to determine whether parallel regulatory changes should be made at those agencies to give effect to the purpose of the Order.
    
    
  • • The Order directs the Securities and Exchange Commission to facilitate access to alternative assets for participant-directed defined-contribution retirement savings plans by revising applicable regulations and guidance.

  The orders, which were not publicly scheduled, were announced shortly before Trump signed a proclamation declaring August 7, 2025, Purple Heart Day at an event with more than 100 purple recipients in the East Room.