Politico spotlights ‘powerful’ ICBA push for crypto oversight

ICBA’s push for policymakers to rein in the crypto industry as part of its agenda for the 118th Congress made headlines in Politico.

ICBA Advocacy: Friday’s Politico Morning Money reported that “powerful” and “beloved” community banks are using their “deep well of Washington clout” to bolster inadequate crypto oversight and to resist efforts to let nonbank stablecoin issuers access the Fed’s payment rails.

Key Concerns: In the article—which notes that community banks comprise 99% of all U.S. banks—ICBA’s Paul Merski said crypto poses risks to the broader financial industry and lacks sufficient anti-money laundering safeguards.

Crypto Fallout: “It’s up to the crypto sector to prove at this point that they’re safe, secure and superior, and I don’t think they’ve made that case,” Merski said. He also noted that crypto firms pitched a competitive advantage of being unregulated. “We saw the consequences of that,” he said.

Background: ICBA last week shared its policy priorities for the 118th Congress with members of the House and Senate. In a letter to lawmakers and a full-page ad that ran in Politico, ICBA said its policy recommendations on behalf of community banks are designed to promote economic prosperity while avoiding misguided policies that carry unintended consequences.

CFPB Response: The Politico report followed CNBC’s coverage of ICBA’s opposition to a new Consumer Financial Protection Bureau proposed rule on credit card late fees. The outlet cited ICBA’s call for the CFPB to seek input from small financial institutions under the Small Business Regulatory Enforcement Fairness Act to mitigate the negative impact of its rulemaking.