CLARITY Shifts Local Lending Funds to Large Platforms: Vote NO on Crypto Bill

I’m writing to urge you not to support the Digital Asset Market Clarity (CLARITY) Act, H.R. 3633, when it comes before the Senate unless the bill is amended to address several critical concerns. While I understand the goal of bringing greater clarity to crypto regulation, the current approach risks harmful gaps in investor protection and market integrity. First, the bill should not rely too heavily on functional or maturity-based classifications that can be manipulated through corporate structuring or product design. If regulatory treatment can shift based on technical framing rather than underlying economic reality, investors will continue to face uncertainty and unequal protections. Second, any jurisdictional split between the SEC and the CFTC must be paired with robust, enforceable consumer safeguards. I’m concerned that a “clearer” framework could still leave retail investors exposed—particularly regarding custody, disclosure, marketing practices, conflicts of interest, and access to dispute resolution. The Senate should ensure that retail-facing activity is subject to consistent baseline protections regardless of how a token is categorized. Third, the bill should strengthen oversight of intermediaries and market participants, including trading venues, brokers, and custodial services. Crypto markets are especially vulnerable to fraud, manipulation, and misleading conduct. Clear rules should explicitly address market integrity, including prevention of wash trading, insider dealing, and coordinated price manipulation, with meaningful penalties for violations. Fourth, as a credit union member, I insist that the bill provide a clear, enforceable framework for stablecoins and DeFi that prevents deposit-like incentives from driving flight of local capital away from credit unions and community banks. Stablecoins can be marketed with rewards, loyalty programs, and “yield-like” benefits that function economically like interest on deposits, encouraging households and small businesses to move funds out of locally regulated institutions and into large platforms. That dynamic can weaken local balance sheets and reduce community lenders’ ability to provide credit—especially in rural and agricultural communities that rely on relationship lending. In practice, this bill’s support of stablecoins virtually assures that Big Tech and large platforms will capture the capital needed to finance home equity and agricultural loans elsewhere. The Senate should require specific standards for stablecoin reserve quality and transparency, redemption rights and redemption timing, and responsibility for protocol-affecting actors. Advertising, marketing practices, and reward structures must not create loopholes that replicate bank deposit competition through technical re-labeling. Finally, I ask that you require transparent implementation timelines, measurable compliance standards, and adequate resources for enforcement agencies. If the bill becomes law without these guardrails, it will function as an unfunded mandate, and the public will bear the cost of confusion. I respectfully request that you vote against the CLARITY Act unless these issues are addressed through amendments that deliver real investor protection, market integrity, protection of local capital, and accountability.