Five of the most powerful banking lobby groups in the United States have jointly rejected a key stablecoin compromise in the CLARITY Act just days before a critical Senate Banking Committee markup scheduled for May 14, throwing the bill’s near-term prospects into fresh uncertainty.
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 coordinated statement this week pushing back against stablecoin yield language drafted by Senators Thom Tillis and Angela Alsobrooks. The coalition argued the proposed compromise falls short of their policy goals and leaves what they described as dangerous loopholes that could accelerate deposit flight away from traditional banks.
At the heart of the objection is Section 404 of the CLARITY Act. The banking groups contend that even with the revised language, crypto platforms would still be permitted to offer rewards tied to account balances and holding periods, which they argue is functionally equivalent to paying deposit interest, just under a different label. In their joint statement, the coalition warned that yield-earning stablecoins could reduce consumer, small-business, and farm loans by one-fifth or more, adding that it is “imperative that Congress get this right.”
Sponsors hold firm
The response from the bill’s bipartisan architects was swift and direct. Senator Cynthia Lummis, who chairs the Senate Banking Subcommittee on Digital Assets, described the finalised compromise text as the product of months of difficult negotiations and said it represents a deal “we can all live with.” Senator Tillis was sharper in his public defence, suggesting that certain parts of the traditional finance sector may not want the CLARITY Act to pass in any form, and are using the stablecoin yield debate as a vehicle to stall the legislation indefinitely. His closing message to opponents 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 united front from Lummis and Tillis signals that the bipartisan coalition behind the compromise intends to hold its ground as the markup window closes in.
Where the bill stands
The CLARITY Act has had a long and turbulent path. It cleared the House by a wide margin of 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. Senators including Lummis and Bernie Moreno have previously warned that failure to pass the bill before the May 21 Memorial Day recess could push the next viable legislative window all the way to 2030.
Senate Banking Committee Chairman Tim Scott has confirmed the markup hearing for May 14 at 10:30 am. The White House has set a July 4 target for the bill to reach the president’s desk, with crypto adviser Patrick Witt describing the stablecoin yield deal as closed from the administration’s perspective. Ripple CEO Brad Garlinghouse, speaking at Consensus Miami 2026 this week, described the past week as a “big positive shift” in Senate momentum.
Market sentiment around the bill’s passage remains cautiously optimistic. Prediction markets currently price the CLARITY Act’s odds of becoming law in 2026 at above 60%, while Galaxy Digital’s head of research Alex Thorn has placed the figure closer to 50-50. A HarrisX poll published this week added further context: 52% of registered US voters said they support the legislation, with 47% indicating they would consider backing a candidate outside their preferred party if that candidate supported the bill and theirs did not.
For the CLARITY Act to reach the president’s desk, it must still clear the Senate Banking Committee markup, survive a 60-vote floor threshold, be reconciled with the Senate Agriculture Committee version, and then aligned with the House-passed text, each step carrying its own risk of delay or failure. The banking lobby’s last-minute intervention has added a new layer of pressure to a bill that was, just weeks ago, looking closer to the finish line than at any point in its history.
