IBAT sent a letter to Senate Banking Committee Chairman Tim Scott (R-SC) and Senators John Cornyn (R-TX) and Ted Cruz (R-TX) outlining a key flaw in Section 401 of the Clarity Act. As drafted, the bill could allow Office of the Comptroller of the Currency (OCC) chartered trust institutions to engage in crypto-collateralized lending and other bank-like activities without the prudential oversight required of insured banks. A close review showed the language could unintentionally grant these trust entities de facto banking powers well beyond congressional intent.
Senate Banking staff responded quickly, and IBAT immediately provided targeted statutory language to correct the issue — a clean fix that preserves existing trust-charter authority while ensuring “business of banking” powers apply only to insured national banks. That technical correction is now under active consideration. Read the letter here.
