Senators Herb Kohl (D-WI) and Mike Enzi (R-WY) have proposed the Savings Enhancement by Alleviating Leakage in 401(k) Savings Act (SEAL), which would limit the number of loans that participants can take from their 401(k) to no more than three at a time.
Currently, an employee with an outstanding loan who loses his or her job must pay back the loan within 60 days. The SEAL Act would give the participant until the tax deadline for that year to repay the loan and allow the participant to deduct the early withdrawal penalty from the loan balance.
