American Bankers Association Urges Banks to Lobby Against Clarity Act
The American Bankers Association (ABA) is urging member banks to lobby senators against the Clarity Act before Thursday's vote.
The ABA warns that the "stablecoin loophole" in the bill allows stablecoin issuers to pay interest-like returns, which could lead to a drain of bank deposits, threatening financial stability and economic growth.
ABA CEO Rob Nichols has written to bank CEOs, asking them to immediately contact senators and mobilize employees, stating that this is a critical moment to protect the deposit monopoly.
Source: Public Information
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The American Bankers Association previously sent a letter on May 8, along with several banking trade groups, to Senate Banking Committee Chairman Tim Scott and ranking member Elizabeth Warren, requesting tighter language on stablecoin returns in Section 404 of the Clarity Act. This urgent mobilization is the banking sector's last major push before Thursday's markup, continuing its long-standing vigilance against stablecoins competing with deposits.
On the capital front, the ABA is shifting bank resources from passive compliance to active lobbying and communication with Congress, motivated by the desire to maintain the traditional deposit-dominated funding intermediary position and prevent stablecoins from circumventing prohibited return clauses through activity rewards or membership programs. Resources are being directed to strengthen the traditional banking lobbying machine and regulatory coalition.
Similar cases include the banking sector's previous strong opposition to Libra/Diem and its cautious stance on CBDCs. Currently, U.S. financial regulation is in a control phase transitioning from bank dominance to a parallel crypto system, with the compromise clauses on stablecoins in the Clarity Act being the focal point of this struggle.
Essentially, this is about the transfer of pricing power: the pricing power of funding intermediaries is shifting from the traditional bank deposit monopoly to competitive yield products offered by stablecoins. The mechanism is that if legislation allows for similar returns, it will accelerate the flow of deposits from the heavily regulated banking system to lightly regulated stablecoin issuers, forcing banks to lobby to maintain their existing capital concentration advantage and delay this structural reconstruction.
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Monopolies fear not regulation, but rather alternatives that can provide similar returns with greater flexibility. The more intense the lobbying, the more thoroughly the pricing power is challenged. Deposits are the lifeblood of banks; whoever seizes the returns first will also seize the pricing power.