CLARITY Act in Jeopardy as Senate Democrats Oppose Trump-Linked Bank Charter

The passage of the CLARITY Act is in jeopardy due to the approval of a bank charter for World Liberty Trust Company, a subsidiary owned by Donald Trump's family. The Office of the Comptroller of the Currency (OCC) granted the charter on August 14, with conditions that must be met before it becomes fully operational. This decision has sparked opposition from two key Senate Democrats, Ruben Gallego and Angela Alsobrooks, who had previously co-sponsored the bill.

Gallego and Alsobrooks have publicly committed to opposing the bank charter approval, co-signing Senator Warren's Ending Presidential Corruption Act, which would bar bank regulators from approving charter applications connected to the sitting president. This has put them at odds with their own party's leadership, who had been negotiating a bipartisan ethics counterproposal. The proposal aimed to give state attorneys general authority to enforce crypto prohibitions on public officials and require Trump to divest his crypto holdings.

The CLARITY Act requires 60 votes to pass the Senate, and with two Republican senators expected to vote against it, Democrats will need as many as nine votes to reach the threshold. The math is now more challenging for supporters of the bill, making passage uncertain. Prediction market traders have already reduced their odds of passage from 82% in February to 20% as of August 17.