Five developments from the past six weeks. The Senate Banking Committee voted 15-9 on May 14 to advance the CLARITY Act to the Senate floor; Section 401 affirmatively authorizes banks and credit unions to use digital assets for payments, custody, clearing, and settlement, and Section 404 stablecoin-yield language was retained. President Trump signed a May 19 Executive Order directing the Fed and other regulators to evaluate fintech and digital-asset access to Fed payment accounts. The OCC’s GENIUS Act stablecoin comment window closed May 1; the ICBA estimated a $141B–$850B swing in community-bank lending. Federal banking agencies finalized a lower 8% Community Bank Leverage Ratio (effective July 1) and proposed the first CAMELS overhaul in 30 years. Senator Elizabeth Warren challenged nine OCC trust bank charters granted to digital-asset firms, with a June 1 records deadline.
Senate Banking Committee Advances CLARITY Act 15-9; Section 401 Affirmatively Authorizes Digital-Asset Activities for Banks and Credit Unions
On May 14, the Senate Banking Committee voted 15-9 to advance H.R. 3633, the Digital Asset Market Clarity Act of 2025, to the Senate floor. All 13 Republicans were joined by Democrats Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD); both stated their committee votes are conditional and may not translate to floor support. Senator Warren’s amendment to strike Sections 401, 402, and 403, the provisions establishing new bank and credit-union digital-asset authorities, failed 11-13.
Section 401 — bank and credit-union digital-asset powers. Section 401 affirmatively authorizes U.S. banks, federal credit unions, federally insured state-chartered credit unions, and financial holding companies to use digital assets for payments, custody, clearing, and settlement without prior regulatory approval. Section 401(g) lists newly authorized digital-asset activities for national banks. Section 401(g)(13) specifically authorizes commercial banks to engage in “underwriting, dealing in, or making a market in digital assets,” even where they lack equivalent authority for equity securities. The Conference of State Bank Supervisors has asked the committee to clarify that uninsured national trust charters do not receive the same powers as insured national banks, limit enumerated 401(g) powers to insured national banks, and strike 401(g)(13) so digital-asset underwriting and market-making are regulated consistently with equity securities.
Section 404 — stablecoin yield compromise. Section 404 prohibits stablecoin issuers from paying interest “economically or functionally equivalent” to a bank deposit while permitting rewards tied to bona fide activities. After the vote, the ABA, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, ICBA, and National Bankers Association issued a joint statement acknowledging “several significant improvements” while continuing to advocate for “tightening the prohibition on interest-like rewards for holding stablecoin.”
The bill now moves to the Senate floor, where the 60-vote threshold remains. Analysts expect a floor vote before the August recess.
For banks: Section 401, if enacted, provides affirmative federal statutory authority for banks and credit unions to offer Bitcoin and other digital-asset services without prior regulatory approval. The breadth of 401(g)(13) is the live debate among regulators. Section 404 outcomes remain subject to floor amendment and reconciliation with the Senate Agriculture Committee’s Digital Commodity Intermediaries Act.
Sources: Senate Banking Committee | CSBS letter on bank powers and Section 401 | BPI/ABA joint statement
Trump Executive Order Directs Fed to Evaluate Fintech and Digital-Asset Firm Access to Payment Rails
On May 19, President Trump signed Executive Order “Integrating Financial Technology Innovation Into Regulatory Frameworks.” It directs federal regulators to identify rules that “unduly impede fintech firms from entering into partnerships with federally regulated institutions” within 90 days; the Fed to assess broader Fed payment-account access for uninsured depositories and non-bank fintech firms (including digital-asset firms) within 120 days; and regulators to take action steps within 180 days. Kraken became the first digital-asset firm to obtain a Fed master account earlier in 2026.
For banks: Expanded non-bank access to Fed payment rails would change the competitive position of community and regional banks for fiat settlement. The order grants no new access on its own; the question is whether the bank-partnership model is reinforced or whether direct non-bank Fed access becomes the alternative path.
Sources: CoinDesk — Trump orders Fed to review crypto firms’ payment-rails access
OCC GENIUS Act Comment Window Closes; ICBA Models $141B–$850B Range for Community-Bank Lending Impact
The OCC’s GENIUS Act stablecoin comment period closed May 1 without extension. Three federal rulemakings remain open with periods closing in early June: the FDIC’s April 7 rule on stablecoin issuance by bank subsidiaries (40% single-custodian reserve cap, full-reserve requirement, two-business-day redemption, no yield to holders); the Treasury FinCEN/OFAC April 8 BSA and OFAC obligations for stablecoin issuers; and the Treasury April 3 NPRM on state-path equivalency for nonbank issuers with $10 billion or less in outstanding issuance.
The OCC comment letters surface a hardened divide over the definition of prohibited yield. The ICBA estimated community-bank lending would fall by $141 billion (4%) under a full yield prohibition and by as much as $850 billion if issuers route value to holders through third-party arrangements, equivalent to “roughly one in five dollars currently lent by community banks.” The Bank Policy Institute, Consumer Bankers Association, and Financial Services Forum filed a joint letter calling for an explicit ban on “any economic benefit tied to holding stablecoins.” Coinbase asked for a minimalist reading.
For banks: Four federal regulators have GENIUS Act stablecoin rules in play; the OCC’s is in final drafting and the FDIC, FinCEN/OFAC, and Treasury rules close in early June. Statutory compliance is required by January 2027.
Sources: OCC Bulletin 2026-3 | American Banker — GENIUS rule comments
Federal Banking Agencies Lower CBLR to 8%; FFIEC Proposes First CAMELS Overhaul in 30 Years
On April 23, the Federal Reserve, FDIC, and OCC jointly finalized a rule lowering the Community Bank Leverage Ratio threshold from 9% to 8% and extending the grace period from two quarters to four, effective July 1, 2026, for qualifying institutions with less than $10 billion in total consolidated assets.
On May 19, the FFIEC proposed an overhaul of the CAMELS rating system, the first revision in 30 years. The proposal shifts supervisory rating emphasis away from a bank’s process for managing risks and toward factors that materially impact financial condition, reduces the weight management grades carry, and requires rating downgrades to be tied to explicit financial risks. Comments are due August 17, 2026.
For banks: The CBLR change affects capital headroom for growth, acquisitions, and new product lines. The CAMELS proposal is more consequential: shifting toward material financial risk and away from management-process grading changes how examiners evaluate adoption of new technology and product programs, including digital-asset services.
Sources: Federal Reserve — CBLR final rule | FFIEC — CAMELS overhaul proposal | American Banker — CAMELS rating overhaul
Bank Bitcoin Distribution Accelerates; Senator Warren Challenges Nine OCC Trust Charters Granted to Digital-Asset Firms
Morgan Stanley launched MSBT on April 8, the first spot Bitcoin ETF issued by a major U.S. bank. MSBT drew $34 million on day one, crossed $100 million in its first week, and carries the category’s lowest expense ratio at 0.14%. Goldman Sachs filed April 14 for an actively managed Bitcoin Premium Income ETF. On May 13, Charles Schwab began rolling out spot Bitcoin trading to retail clients across its $11.77 trillion brokerage base, using Schwab Premier Bank for custody and Paxos for execution.
On May 19, Senator Elizabeth Warren sent a formal letter to OCC Comptroller Jonathan Gould challenging the agency’s approval of nine national trust bank charters granted to digital-asset firms: Ripple, Paxos, Circle, Fidelity Digital Asset Services, BitGo, Crypto.com, Protego, Bridge, and Coinbase. Warren argues the OCC violated the National Bank Act by approving entities conducting non-fiduciary activities including staking, lending, and stablecoin issuance. The OCC must produce charter applications and related communications by June 1, 2026. Anchorage Digital, the only digital-asset firm with a fully approved national trust bank charter, was not named.
For banks: Bank-distributed Bitcoin product is now a live competitive category at three of the largest U.S. wealth and brokerage platforms. The Warren letter introduces political risk to the trust-charter route the named firms have used. June 1 is the next concrete date.
Sources: Bitcoin Magazine — Schwab spot Bitcoin trading | CoinDesk — Warren OCC trust charter letter | Senate Banking Committee minority release
What to Watch
Warsh confirmed Fed Chair 54-45 (May 13). The narrowest margin on record. First FOMC meeting under Warsh: June 16-17.
House passes three community-bank relief bills (May 13). SMART Act (alternating limited-scope exams for well-capitalized firms under $6B), TRUST Act (raises 18-month exam-cycle threshold from $3B to $6B), and a Treasury mentorship-program codification bill.
Bank of England signals shift on stablecoin caps (May 19). Deputy Governor Sarah Breeden indicated the BoE is considering aggregate-issuance guardrails rather than per-holder caps.
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