Sen. Moreno: Bank Lobby ‘In Full Panic’ Over CLARITY Yield Rules

Sen. Bernie Moreno said the American Bankers Association went into ‘full panic’ after ABA CEO Rob Nichols sent a letter urging bank CEOs to lobby senators to oppose provisions in the CLARITY Act that would limit stablecoin yields. Moreno, an Ohio Republican on the Senate Banking Committee, posted the criticism on X as lawmakers prepared for a committee markup.

Nichols’ Sunday letter, sent to bank CEOs nationwide, called for ‘immediate engagement’ on stablecoin yield policy. The letter warned the committee’s draft could prompt deposit outflows into payment stablecoins and pose risks to economic growth and financial stability. An excerpt read: ‘we believe committee members may not be fully aware of the risks to the economy by the stablecoin loophole.’

Moreno rejected that framing, noting the question was debated during earlier GENIUS Act discussions led by Sen. Bill Hagerty. On X he wrote ‘The banking cartel is in full panic mode’ and expressed intent to vote to preserve the CLARITY yield limits.

The Senate Banking Committee will mark up the CLARITY Act on Thursday, May 14, at 10:30 a.m. ET. Senators Thom Tillis and Angela Alsobrooks negotiated the compromise text. The language bars yields ‘economically or functionally equivalent’ to deposit interest while still permitting rewards tied to bona fide platform activity. A successful markup would send the bill toward a full Senate floor vote; a stalled markup could delay U.S. crypto legislation for the rest of the session.

Polymarket bettors currently give the bill about a 73% chance of becoming law this year.

Patrick Witt of the President’s Council of Advisors for Digital Assets criticized the ABA’s outreach, writing that bank trade CEOs declined White House meetings in February aimed at resolving the yield question. He wrote: ‘I specifically requested the attendance of Mr. Nichols and other bank trade CEOs at the meetings we hosted back in February to resolve the stablecoin rewards/yield issue. They refused. I guess the White House was beneath them? In their defense, I wouldn’t want to have to defend their position in public either.’

The debate centers on whether digital platforms can offer user incentives without replicating traditional deposit interest that could shift funds out of the banking system. Bank groups have warned that weakening the provision could drain deposits and threaten stability, while supporters of the CLARITY language have said the rules would prevent banks from being undercut by interest-like stablecoin rewards while preserving legitimate platform incentives.