The American Bankers Association and three financial sector associations today expressed support for a House attempt to overturn President Biden’s veto of H.J. Res. 109—a Congressional Review Act resolution that would override a Securities and Exchange Commission staff accounting bulletin that changes the way banks and other publicly traded entities are expected to account for digital assets held in custody.
H.J. Res. 109 was passed by the House and Senate with bipartisan support earlier this year. Biden vetoed the resolution, saying it would inappropriately constrain the SEC’s ability to set guardrails and address future issues. In a letter to House leaders, the associations said that SEC’s Staff Accounting Bulletin 121 has curbed the ability of their member banks to develop and bring to market at scale certain digital asset products and services. They urged lawmakers to vote in favor of overturning the veto, which requires the support of two-thirds of the House and Senate. (The House on Thursday voted 228-184 to overturn the veto, which falls short of the two-thirds requirement.)
“SAB 121 represents a significant departure from longstanding accounting treatment for custodial assets and threatens the industry’s ability to provide its customers with safe and sound custody of digital assets,” the associations said. “Other, nonbank digital asset platforms subject to SAB 121 are not required to meet the same capital, liquidity or other prudential standards as banks and therefore do not face the economically prohibitive implications of SAB 121. Limiting banks’ ability to offer these services leaves customers with few well-regulated, trusted options for safeguarding their digital asset portfolios and ultimately exposes them to increased risk.”
