US banks reject CLARITY Act stablecoin deal days before Senate vote

The US banking lobby is mounting a last-minute push to stall the CLARITY Act just days before its scheduled Senate Banking Committee markup on May 14.

The American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America issued a joint statement this week rejecting the compromise stablecoin yield language drafted by Senators Thom Tillis and Angela Alsobrooks. The coalition said the proposed language falls short of its policy goals and leaves dangerous loopholes that could trigger deposit flight from traditional banks.

The banking groups argue that Section 404 of the CLARITY Act still permits crypto platforms to offer rewards tied to account balances and how long users hold assets, which they say amounts to offering deposit interest under a different name. “Research demonstrates that yield-earning stablecoins could reduce all consumer, small-business, and farm loans by one-fifth or more,” the coalition said in its joint statement, adding that it is “imperative that Congress get this right.”

Lummis and Tillis push back

The response from the bill’s sponsors was immediate. Senator Cynthia Lummis, who chairs the Senate Banking Subcommittee on Digital Assets, posted on X that the finalized bipartisan text “is the culmination of months of hard work to deliver a compromise on yield we can all live with.” Senator Tillis, who co-authored the deal, was sharper in his pushback, warning that certain factions within traditional finance may simply oppose any version of the CLARITY Act and are using the stablecoin yield debate as a mechanism to stall the legislation indefinitely.

Tillis’s closing line in his public defense left little room for ambiguity: “Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree.” The synchronized public defense from Lummis and Tillis signals the bipartisan coalition behind the compromise is holding firm as the markup window narrows.

The CLARITY Act cleared the House 294 to 134 in July 2025 and passed the Senate Agriculture Committee in January 2026, but has repeatedly stalled in the Senate Banking Committee over the stablecoin yield dispute. As reported, senators including Cynthia Lummis and Bernie Moreno have said that failure before the May 21 Memorial Day recess could push the next viable window to 2030.

What comes next

Senate Banking Committee Chairman Tim Scott confirmed the markup hearing for May 14 at 10:30 am. The White House has set a July 4 target for passage, with crypto adviser Patrick Witt describing the stablecoin yield deal as closed. Ripple CEO Brad Garlinghouse said at Consensus Miami 2026 this week that the past week represented a “big positive shift” in Senate momentum.

Galaxy Digital head of research Alex Thorn has estimated the bill’s passage odds at roughly 50-50, while prediction markets currently put the figure above 60%. A HarrisX poll released this week found that 52% of registered US voters support the CLARITY Act, with 47% saying they would consider backing a candidate outside their preferred party if that candidate supported the legislation and theirs did not.

For the bill to reach the president’s desk, it must clear the Senate Banking Committee markup, survive a 60-vote floor threshold, be reconciled with the Senate Agriculture Committee version, and then reconciled with the House-passed text. Each of those steps carries its own risk of failure.

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