NCLC joined the American Bankers Association, Americans for Financial Reform, Conference of State Bank Supervisors, Independent Community Bankers of America, Money Transmitter Regulators Association, and National Conference of State Legislatures urging Congress to strike Section 16(d) of the recently enacted GENIUS Act.
Section 16(d) allows any state-chartered uninsured depository institution with a stablecoin subsidiary to perform traditional (i.e., not solely related to payment stablecoins) money transmission and custody activities nationwide through that subsidiary, thereby bypassing host state licensing and allowing substantially less state oversight. This unprecedented overriding of state law and supervision weakens vital consumer protections, creates opportunities for regulatory arbitrage, and undermines state sovereignty.
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