Deposit flight concerns have ramped up as the regulatory apparatus becomes more “lenient” and new paths such as trust charters and skinny master accounts are embraced, ICBA’s CEO said.

When it comes to desired changes to the Clarity Act, the digital-asset market structure legislation pending before the Senate, banking trade groups are holding a hard line.

“There’s always the suggestion, well, how do we make both sides happy on this?” said Rebeca Romero Rainey, president and CEO of Independent Community Bankers of America. But that’s where the banking industry is at “an impasse.”

“For us, this loophole has to be closed entirely,” she said. “There's not a middle ground in terms of resolution.”

Banking trade groups have suggested changes to the language of the legislation that would ensure the closure of a loophole they say would allow digital-asset companies to issue an equivalent to yield or interest. “Ambiguities” within the bill could allow stablecoins “to effectively function as substitutes for deposits,” trade groups have told senators.

Romero Rainey, who has led the trade group since 2018, spoke with Banking Dive recently about deposit flight concerns, how she approaches engagement with the Trump administration and what a more “proportionate” regulatory tone means for community banks.

REBECA ROMERO RAINEY: Our main concern with Clarity gets into the potential for stablecoin exchanges to be able to issue an interest- or yield-like equivalent on stablecoins. Instead of just becoming a payment mechanism, these stablecoins begin to look and feel a whole lot like deposits without the traditional infrastructure that surrounds today's depository system.

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