The Senate Banking Committee is marking up the CLARITY Act today.  Senators have an important choice: will the legislation strengthen both innovation and Main Street finance, or will it end up hurting local economies by undermining the community banks that are vital for local economies?

HLF believes we can and should support responsible financial innovation.  But we must also ensure that the CLARITY Act does not weaken the community banks and credit providers that Hispanics and other underserved communities rely on.

Community banks play a unique role in the American economy:

  • They provide small-business loans that help local entrepreneurs open their doors, expand operations, and hire more workers.
  • They support family-owned businesses and first-time borrowers who often don’t fit the cookie-cutter profiles favored by large institutions.
  • They understand the local realities of the communities they serve.

For Hispanic small-business owners, for example, relationship-based banking is not an abstraction.  It is the difference between being able to secure a line of credit to hire more workers—or putting growth plans on hold.

Analysis of the CLARITY Act from community banking leaders highlights targeted changes to the bill’s language.  These recommendations do not seek to block the bill or oppose digital-asset innovation.  Instead, they are aimed at:

  • Making sure the bill does what it intends to do without unintended side effects;
  • Preventing sudden, large shifts of deposits away from community banks that could tighten credit in local communities; and
  • Preserving the ability of community banks to continue supporting small businesses, homeowners, and local development.

These technical fixes align with the bill’s stated goals while better protecting community banks and their customers.

Innovation and Community Banking Can Coexist.  Well-designed legislation can encourage responsible innovation in digital finance while preserving the critical functions of traditional banks, especially those that serve smaller markets.

Advancing innovation should never mean abandoning the small businesses and workers who drive our real economy.

HLF urges the Senate Banking Committee to:

  1. Take seriously the concerns raised by community banks and the communities they serve;
  2. Incorporate the reasonable language changes proposed by community banking leaders; and
  3. Ensure that the CLARITY Act strengthens, rather than weakens, access to credit for Main Street businesses.

These changes would protect local jobs, entrepreneurship, and economic opportunity—especially in communities that already face barriers to capital.

Getting the CLARITY Act right is a test of whether we can embrace the future of finance without leaving Main Street behind.