Banking groups press Senate to tighten CLARITY Act limits on stablecoin "yield"

U.S. banking trade groups are renewing their push to curb stablecoin features that resemble deposit interest. On July 13, 2026, the American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), and a coalition of state banking associations sent a joint letter to Senate Majority Leader John Thune and Minority Leader Charles Schumer urging changes to the CLARITY Act before it moves forward. The groups say Section 404, as written, could still allow stablecoin issuers to offer returns that function like interest on a bank deposit without being treated as such under the law. They argue the provision was intended to keep payment stablecoins from operating like interest-bearing deposit accounts, which they say would give issuers a regulatory arbitrage advantage over banks that face capital and lending constraints. ICBA warned of sizable spillovers if tighter prohibitions are not codified. Its analysis projects a potential $1.3 trillion drop in bank deposits, which it links to an estimated $850 billion hit to community bank lending capacity. The July 13 letter marks the coalition's second formal appeal in roughly two months. On May 8, 2026, the same organizations made a similar request to leaders of the Senate Banking Committee, arguing the bill needed stronger language before advancing. The committee moved the legislation on May 14, 2026, approving the CLARITY Act in a 15-9 vote. The version that cleared committee included revisions to the yield provisions, changes the groups attribute to the work of Senators Thom Tillis and Angela Alsobrooks. The banking organizations said those edits were progress but still insufficient. The ABA also cited consumer attitudes to bolster its case. A Morning Consult survey commissioned by the ABA and conducted in May 2026 found notable support for limiting yield-like features on stablecoins, casting the issue as protection for local lending rather than shielding incumbent banks from competition.