In a recent op-ed, American Bankers Association CEO Rob Nichols says America's banks want to strengthen the Clarity Act, not kill it. I'll take him at his word, but time is short, so let's look at the calendar.
On September 15, less than four weeks from now, the Senate will vote on whether to debate this bill. That vote needs the OK from 60 senators. Afterward, the Senate has less than three working weeks before the fall spending fight dominates the Senate calendar and the legislative window effectively closes ahead of the midterms. That’s a very tight window to get this bill over the line. With that in mind, the big banks are introducing a demand to reopen a provision that had been negotiated over many months, with their representatives at the table the entire time. Reopening it now would not improve the bill. It would restart a negotiation nobody has time to finish. We feel that this “discussion” is simply a delay to kill the legislation.
Summer Mersinger is CEO of the Blockchain Association and a former commissioner of the Commodity Futures Trading Commission.
A "handful of word changes" is actually a major policy change
Mr. Nichols presents two of ABA’s proposed changes as modest: replace the bill’s existing standard with “substantially similar” and strike the word “solely.” Neither change is modest.
"Substantially similar to interest" is a legal standard, and an elastic one. Almost any program returning economic value to a customer can be made to look substantially similar to interest by a regulator inclined to see it that way. Banks understand this, because they run programs that would struggle under the test: cash-back rates that climb with spending or loyalty tiers keyed to balances. No bank would accept a statute leaving its own rewards hostage to that phrase.
"Solely" comes from the GENIUS Act, which barred issuers from paying yield "solely in connection with the holding, use, or retention" of a stablecoin. The word limits the prohibition to rewards made for holding the coin itself. Take it out and the provision reaches conduct Congress deliberately placed outside it.
Both edits would change what the bill does. That is a nontrivial ask of the bill drafters, and it deserves to be argued on its own terms rather than presented as a simple language fix.
I spent three years as a CFTC commissioner. I know what ambiguous statutory language looks like, and what it costs an agency when Congress hands it a vague standard and walks away. ABA’s proposal would replace a negotiated standard with new ambiguity and leave regulators to sort out the consequences.