This bill would prohibit the Federal Reserve from paying interest on the reserve balances that banks hold at the Fed. Currently, the Federal Reserve pays interest on these deposits, which banks use to meet regulatory requirements. The legislation would eliminate this practice entirely, affecting all depository institutions that maintain balances at Federal Reserve banks. Supporters argue this would reduce subsidies to large banks, while critics contend it could affect the Fed's ability to manage monetary policy and may increase costs for smaller financial institutions. The bill was introduced in June 2025 and referred to the Senate Committee on Banking, Housing, and Urban Affairs.
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