00:00Clarity Act became a major sticking point for traditional banks, which argued parts of the
00:04bill could pull deposits out of the banking system and threaten lending. Let's discuss
00:09where the industry goes from here with independent community bankers of America CEO,
00:13Rebecca Romero Rainey. Rebecca, thank you so much for joining us. So the Senate just failed
00:17to advance to Clarity. So then is the banking industry's objection to stablecoin yield
00:22now the biggest obstacle to getting this bill done?
00:26It absolutely is. As we think about stablecoin yield, it is something that would potentially
00:32pull deposits out of local community. And that's important because that's what funds loans in this
00:38country. It's what funds small businesses, farmers and ranchers. You fought Clarity. You won. We've
00:45spoken to you quite a bit over the past few months. Your view of representing independent community
00:50bankers of America have really been made clear to us. This outcome, though, because the SEC acted
00:56anyway, is it better or worse for banks? Well, the way I look at it is if Clarity had passed
01:04as
01:04drafted, it's codified in law. And the prohibition on yield and stablecoins would be law. So yes,
01:11we'll need to manage and work through a situation where the regulatory environment may allow it,
01:17but it's not been made permanent. And that really is our focus here. If we're going to do this,
01:22let's get it right. And let's ensure an adequate prohibition.
01:25So did you win the battle but lose the war here?
01:28We won for communities in terms of ensuring that as this ecosystem evolves, that we are staying
01:37focused on what it matters in community. And so this is about a next step and important. Again,
01:44this re-edition, it has not been made law. And that really is what concerns me the most.
01:49So if Congress completely banned deals on stablecoin tomorrow, what exactly will we see in an instant?
01:59And there is. There's a group of bipartisan senators that are working on a fix to ensure
02:04this prohibition. What we see is this legislation moves forward focused on payment stablecoins and not
02:10developing an alternative to deposits without the same regulation and activities that the banks are
02:16operating within today. I like that earlier you gave an example of the farmers. And for example,
02:21we have farmers and small businesses, they lose access to credit. What's a real word example?
02:27Like what happens to a Main Street borrower if these deposits actually leave a community bank?
02:33So today, community banks across this country make 60% of all small business loans. They make 80% of
02:40the agriculture loans. The macroeconomic studies suggest that if this prohibition is not fixed,
02:47that could lead to up to an $850 billion decline in lending in those communities. So whether it's farmers
02:55that need access to those lines of credits, first-time homebuyers, especially in rural America,
03:01in those economies where community banks are there for their customers in good and challenging times,
03:06that's potentially put at risk. And we don't think that's right. And let's get this right as we think
03:12about the law that is ultimately codified. Rebecca, it's hard to believe this. We're like
03:17six weeks away from the midterms at this point. We saw the power of the crypto industry in the 2024
03:24election. No question there. How are you right now deploying a financial war chest
03:30ahead of these midterms? Specifically, who are you supporting and why?
03:35So we are supporting the politics of community banking.
03:39Who supports that in Washington?
03:42Many individuals do. And that's what's important. I mean, the fact that this vote failed because the
03:48concerns of communities won, not because of the size of the war chest, because we want to get it right
03:55and we want to ensure that communities have access to credit. To me, that's community winning,
04:01regardless of the size of the war chest. That's getting it right.
04:04So can you take credit, in your view, for this failing in the Senate?
04:09So we take credit for ensuring what, yes, we can take credit. But it's about the fact that
04:16the community bank voice was heard, that the impact to community was valued. And at the end of the day,
04:24there's a group of bipartisan senators that are listening and want to ensure we get this right.
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