The US banking industry is making a final effort to delay the CLARITY Act just ahead of its May 14 Senate Banking Committee markup.
Summary
Five leading banking associations have opposed the Tillis-Alsobrooks compromise on stablecoin yields, arguing that the proposal remains inadequate only days before the Senate review.
Senators Cynthia Lummis and Thom Tillis defended the agreement publicly, suggesting that some banking groups may be trying to block the CLARITY Act entirely.
Betting markets currently estimate the bill has more than a 60% chance of becoming law in 2026, while the White House is aiming for President Donald Trump to sign it by July 4.
The American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America released a joint statement criticizing the revised stablecoin yield provisions written by Senators Thom Tillis and Angela Alsobrooks. According to the groups, the updated language still contains loopholes that could encourage customers to move deposits away from traditional banks.
The banking coalition specifically pointed to Section 404 of the CLARITY Act, arguing that crypto companies would still be able to provide incentives based on account balances and holding periods, which they believe resembles paying interest on deposits under another label. The organizations warned that yield-bearing stablecoins could significantly reduce lending activity for consumers, small businesses, and farms, stressing that lawmakers must address the issue carefully.
Lummis and Tillis defend the proposal
Supporters of the bill quickly responded to the criticism. Cynthia Lummis, chair of the Senate Banking Subcommittee on Digital Assets, said on X that the bipartisan agreement was the result of extensive negotiations aimed at reaching a workable compromise on stablecoin yields.
Senator Tillis pushed back even more strongly, arguing that parts of the traditional banking sector may oppose the CLARITY Act regardless of what changes are made and are using the yield debate to slow the bill’s progress indefinitely. He added that some banking interests may simply not want the legislation to move forward at all.
The coordinated response from Lummis and Tillis suggests the bipartisan group backing the bill remains united as the markup deadline approaches.
The CLARITY Act previously passed the House in July 2025 by a 294-134 vote and later cleared the Senate Agriculture Committee in January 2026. However, disagreements over stablecoin yield provisions have repeatedly delayed progress in the Senate Banking Committee. Senators including Lummis and Bernie Moreno have warned that if the bill fails to advance before the May 21 Memorial Day recess, another opportunity may not come until 2030.
What happens next
Tim Scott, chairman of the Senate Banking Committee, confirmed that the markup hearing is scheduled for May 14 at 10:30 a.m. The White House is targeting July 4 for final passage, while crypto adviser Patrick Witt has described the stablecoin yield negotiations as effectively settled.
At the Consensus Miami 2026 conference, Brad Garlinghouse said recent developments marked a major positive turn for Senate momentum surrounding the legislation.
Meanwhile, Galaxy Digital research head Alex Thorn estimated the legislation’s chances at around 50-50, although prediction markets currently place the odds above 60%. A recent HarrisX survey also found that 52% of registered US voters support the CLARITY Act, while 47% said they could back a candidate outside their preferred party if that candidate supported the bill and their own party did not.
Before reaching the president’s desk, the legislation must still pass the Senate Banking Committee, clear the Senate floor’s 60-vote threshold, be reconciled with the Senate Agriculture Committee version, and finally be aligned with the version already approved by the House. Each stage presents potential challenges that could still derail the bill.
