Days before the Senate Banking Committee's scheduled markup of the CLARITY Act on May 14, the banking lobby launched a last-minute push to stall the legislation. The American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America issued a joint statement rejecting the stablecoin yield compromise drafted by Senators Thom Tillis and Angela Alsobrooks. The coalition argued the proposed language creates dangerous loopholes that could trigger deposit flight from traditional banks.
Section 404 of the CLARITY Act still permits crypto platforms to offer rewards tied to account balances and asset holding duration, which the banking groups say amounts to disguised deposit interest. "Research demonstrates that yield-earning stablecoins could reduce all consumer, small-business, and farm loans by one-fifth or more," the coalition stated, calling it "imperative that Congress get this right."
Lummis and Tillis Strike Back
Response from the bill's sponsors was immediate. Senator Cynthia Lummis, chair of the Senate Banking Subcommittee on Digital Assets, posted on X that the finalized text "is the culmination of months of hard work to deliver a compromise on yield we can all live with." Senator Tillis was sharper, warning that certain factions within traditional finance may oppose any version of the CLARITY Act and are using the yield debate to stall indefinitely. "Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree," he said. The coordinated defense signals the bipartisan coalition is holding firm as the markup deadline looms.
The CLARITY Act passed the House 294 to 134 in July 2025 and cleared the Senate Agriculture Committee in January 2026, but stalled repeatedly in the Banking Committee over stablecoin yield disputes. Senators Lummis and Bernie Moreno have warned that failure before the May 21 Memorial Day recess could push the next viable legislative window to 2030.
What Next
Senate Banking Committee Chairman Tim Scott confirmed the markup hearing for May 14 at 10:30 am. The White House targets a July 4 presidential signature, with crypto adviser Patrick Witt calling the yield deal "closed." Ripple CEO Brad Garlinghouse said this week at Consensus Miami 2026 that Senate momentum saw a "big positive shift."
Galaxy Digital's head of research Alex Thorn estimates passage odds at roughly 50-50, while prediction markets now price the probability above 60%. A HarrisX poll found 52% of registered voters support the CLARITY Act, with 47% willing to cross party lines for a candidate who backs the legislation. The bill faces multiple hurdles: Banking Committee markup, a 60-vote Senate threshold, reconciliation with the Agriculture Committee version, and alignment with the House-passed text—each step carries failure risk.