Legislative Update — Digital Asset Market Structure and Federal Housing Program Reform

In light of concerns over economic headwinds from the conflict in Iran and blockade in the Strait of Hormuz, the White House is anxious to keep its economic agenda items moving. This is especially true with regard to the digital asset market structure bill (CLARITY Act) and the federal housing program reform bill (ROAD to Housing Act).

The White House Office of Legislative Affairs is working overtime with a clear directive to get these bills across the finishing line by June 27. As always, let us know if you need more information at this time.

ROAD to Housing Act Update (H.R. 6644)



• President Trump called on the House to pass the Senate version of the housing bill Monday.

• House Republicans are still not convinced to move forward with the Senate bill, with Representative Chip Roy (R-TX) saying the Senate bill "needs work."

• Section 901, which bans purchases by “investors” who own over 350 single-family homes is still a major point of contention.

• The ban has over a dozen exemptions for certain kinds of homes or types of investors.

• However, there is a concern Section 901 would ban construction in the build-to-rent (BTR) market segment and hurt supply. 

• There are some Republicans who may actually still have an ideological objection to the government banning a transaction between two willing private parties.  

• At that point, it is likely that more exceptions will be added to Section 901.

• In the end, the entire provision may just turn into a porous bureaucratic firewall that is easily worked around with enough lawyers to cut through the red tape. 

• President Trump will have to lean in and help find a compromise.

• Lead opponent Representative Roy almost always supports the President in the end. It is a matter of what he wants.

• The National Association of Realtors and the National Association of Home Builders both opposed Section 901 and have close relationships with the House Financial Services Committee. 

• We suspect that the plan to appease them will be more carve-outs for BTR and maybe other home categories, but not the wholesale removal of Section 901. 

CLARITY Act (H.R. 3633)

• The Senate Banking Committee released legislative text late yesterday.

• One of the most contentious provisions has been incentivizing investments in stablecoins over traditional bank accounts. The new text would prohibit rewards on idle balances of stablecoins, while allowing them on transactions.

• The legislation bans reward payments "solely in connection with the holdings of ... payment stablecoins" or on a "payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit."

• Banking groups have already reacted with swift opposition, including the American Bankers Association, Independent Community Bankers of America, and the Bank Policy Institute mobilizing their members to send 8,000 letters to Senate offices last Friday.

• The Senate Banking Committee markup is tomorrow. Dozens of amendments have been filed.

• The bill is expected to pass out of Committee with bipartisan support at this time. 

• The Committee section-by-section is here. 

CLARITY Act Digital Market Structure Background:

• The House and Senate are considering legislation to create rules and regulations for the sale and transfer of certain digital, blockchain backed assets.

• The bill intends to create clear regulatory standards under the Securities and Exchange Commission (SEC) for digital assets that are pegged to U.S. currency and act like securities and the Commodity Futures Trading Commission (CFTC) for digital assets that are akin to commodities, like Bitcoin.

• The legislation would impact digital assets issued by developers like stablecoin or tokens and generally exempts decentralized financial transactions as well as cryptocurrencies that are not pegged to the dollar.

• The bill creates liquidity standards and legal consumer protection standards.

• The legislation also sets standards for development and issuance of these regulated digital assets.

• The thought is that once regulations are clearly defined under the SEC and CFTC, investment into trusted digital assets would boom.

• Banks have generally been skeptical of the legislation fearing that it could siphon deposits from traditional accounts.

• The House bill was widely supported by the digital asset business community.

• The Senate version was pulled in January because of opposition from:



• Banks which opposed allowing the issuance of rewards to entice consumers to shift from traditional banking to digital assets.

• Industry leader Coinbase opposed the Senate’s intention to have the Treasury regulate “decentralized” financial activity under the bill.

• The lack of support from these two key stakeholders has stalled the bill.

• President Trump tried to re-energize this activity in early March in an effort to spur investment and ensure the U.S. market is not surpassed.