CLARITY Act Stablecoin Fight Intensifies as Bank Groups Push Back on Section 404

Five major U.S. banking trade associations are urging lawmakers to reject the CLARITY Act's stablecoin compromise as the Senate prepares a committee markup for the week of May 11 and aims to send the bill to President Trump before July 4. The groups argue Section 404 still allows exchanges to provide rewards tied to tenure, balances, or holding periods, and cite estimates including a potential 20% hit to lending capacity and a $300 billion deposit flight risk by 2028.