Two Democratic senators who helped negotiate an ethics compromise for the crypto market structure bill are now backing legislation that would revoke the charter of a bank tied to the Trump family – a move that says more about the state of CLARITY Act negotiations ahead of a crucial September vote than either has said publicly.
The Bank Charter Trump's Regulator Granted May Have Cost Him CLARITY
19 August 2026 - 17:43 UTC
By Stu Clelland
Ruben Gallego of Arizona and Angela Alsobrooks of Maryland are among 11 co-sponsors of the Ending Presidential Corruption in Banking Act, introduced by Massachusetts Democrat Elizabeth Warren, the ranking member of the Senate Banking Committee. Both had been working with Republicans to find language on conflicts of interest that would let the Digital Asset Market CLARITY Act pass. Both voted with Republicans to advance the bill out of committee, but neither has committed to support it on the Senate floor.
The trigger was the Office of the Comptroller of the Currency (OCC), the US regulator that charters national banks, granting preliminary conditional approval to World Liberty Trust Company on 14 Aug, a bank affiliated with the Trump family's World Liberty Financial crypto venture. The bill followed the next day.
What the bill would actually do
The legislation is being framed as a prospective ban on presidents owning banks. It is that, but the part that matters is retrospective.
Section 3 would bar the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the OCC from approving a national bank charter, a Federal Reserve master account, deposit insurance or any other federal banking licence where a covered person owns or controls more than 10% of any class of voting securities, is an organizer or senior executive, or otherwise exercises controlling influence.
It then requires those three regulators, within 60 days of enactment, to terminate the charters and licences of any bank whose application was approved after 20 Jan 2025 while a covered person met those tests. The date is no accident: it is Trump's inauguration, making the provision retroactive across his entire term.
Covered persons include the President, the vice president, members of Congress, Senate-confirmed executive appointees, certain special government employees attached to the Executive Office of the President, and the spouse or child of the president or vice president.
Passivity may not be the defence it looks like
The OCC's approval leaned on commitments that the Trump-linked stakes are passive. Three entities, StringZ Holdings RSC (DE) LLC, DT Marks SC LLC and AMGUS LLC, gave written undertakings on 13 Jul that their indirect investments in the bank were passive. Eric Trump signed the DT Marks commitment as its president. The OCC also said certain non-US investors in World Liberty Financial were not principal shareholders of the bank, while noting it had taken passivity commitments from US and non-US investors alike.
The regulator addressed conflict-of-interest comments directly, saying the Comptroller and staff acted consistently with their statutory duties, that approvals of this kind are delegated to career staff, and that staff supervise the resulting institution.
The difficulty is that the bill's first limb is an ownership test, not a control test. A passivity commitment speaks to controlling influence. It does not establish whether a covered person directly or indirectly owns more than 10% of the bank's voting securities.
The OCC letter gives no percentages for any of the three entities. Nor can the figure most often cited be transplanted: public disclosures put DT Marks DEFI LLC, a Trump-affiliated entity, at about 38% of the wider World Liberty Financial holding company, but that is a different company from DT Marks SC LLC. The OCC materials do not set out how either maps onto WLTC Holdings. Whether any covered person's indirect stake in the bank's parent company crosses 10% is therefore unanswerable from the public record, and this is precisely the question the bill would force three regulators to answer within 60 days.
Sandmark asked World Liberty Financial whether any entity affiliated with the President or his immediate family holds more than 10% of any class of voting securities in the bank's parent. Whether it considers the passivity commitments would satisfy the bill's ownership test.
Sandmark also asked Senator Warren's office whether undertakings of the kind the OCC accepted would satisfy section 3, and asked the offices of Senators Gallego and Alsobrooks whether co-sponsoring the bill changes their position on CLARITY. None had responded by the time of publication.
A narrower charter than the word bank implies
World Liberty Trust Company would be a national trust bank based in Bay Harbor Islands, Florida, a little over an hour south of the President's private residence of Mar-a-Lago. The bank, a wholly owned subsidiary of WLTC Holdings LLC, would issue and redeem USD1, the group's dollar-backed stablecoin, taking that role from BitGo Bank & Trust, and provide digital asset custody as a fiduciary.
It has committed not to become a bank under the Bank Holding Company Act, has no plans to become an insured depository institution and, for now, does not intend to seek a Federal Reserve master account. Community Reinvestment Act obligations do not apply because it takes no insured deposits. Approval is conditional on the stablecoin business conforming to the GENIUS Act, failing which it must cease or divest those activities.
So the entity is narrower than the headlines imply. The bill, however, defines a covered application to include any federal banking licence, which captures it regardless.
Why this lands on CLARITY rather than on the bank
All 11 sponsors of the bill are Democrats and the Senate is Republican-controlled, which leaves the bill no route to the floor. The consequence runs the other way. Senate Majority Leader John Thune has filed cloture on the motion to proceed to CLARITY, setting a vote for 15 Sep, the day after the Senate returns. Invoking cloture takes 60 votes, which means Republicans need Democrats. The Democrats most likely to supply them were the ones negotiating the ethics language.
Those two have now signed a bill declaring that the President's crypto interests should not include a bank. That is a harder position to walk back from than a negotiating stance, and it narrows the room for the compromise text that was supposed to unlock the vote.
Sandmark reported on 4 Aug that the ethics provision was the most likely thing to kill CLARITY. That was 10 days before the OCC approved the charter.
