Sen. Moreno: Bank lobby in ‘full panic mode’ over CLARITY Act

Sen. Bernie Moreno accused the U.S. banking lobby of being in “full panic mode” after American Bankers Association CEO Rob Nichols urged bank chiefs to push senators to block limits on stablecoin yields. Moreno posted his criticism on X ahead of the Senate Banking Committee markup of the CLARITY Act.

Nichols sent a letter to every bank CEO calling for “immediate engagement” on the bill’s language. He warned the current draft could prompt depositors to move funds into payment stablecoins and cited risks to economic growth and financial stability. The letter described what the ABA called a “stablecoin loophole,” adding that “we believe committee members may not be fully aware of the risks to the economy by the stablecoin loophole.”

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 before the committee. The provision would bar yields that are “economically or functionally equivalent” to traditional deposit interest while allowing bona fide platform rewards tied to user activity.

Patrick Witt of the President’s Council of Advisors for Digital Assets criticized the ABA’s approach, writing that he had invited Nichols and other trade group leaders to White House meetings in February to address stablecoin rewards and yields and that they declined. “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,” Witt wrote.

Moreno rejected the ABA’s framing and pointed to prior debate on the topic during consideration of the GENIUS Act. He posted that bank lobby officials sent a “frantic alert” to CEOs while the public observed Mother’s Day and said he plans to vote in favor of the CLARITY Act provisions aimed at curbing deposit-like stablecoin yields.

If the Banking Committee approves the bill, it would move closer to a full Senate vote. If the measure stalls in committee, advocates say U.S. crypto legislation could be delayed for the rest of the congressional session. Traders on prediction markets have assigned roughly a 73% chance that the CLARITY Act could become law this year.

Bank groups argue that unrestricted stablecoin yields could drain deposits and threaten bank funding. Supporters of the CLARITY text say the language is intended to block interest-like payments while preserving legitimate platform rewards that are not equivalent to deposit interest.