Referred to the House Committee on Financial Services.
The bill amends the Federal Reserve Act to prohibit Federal Reserve Banks from paying earnings on balances held by or on behalf of depository institutions except as allowed for required reserve balances. In effect, it would eliminate interest paid on excess reserves (IOER).
Whether IOER is a bank 'subsidy' or a necessary Fed tool
Relative to its intended legislative type, this bill is a concise statutory amendment that clearly states a prohibition on paying earnings on reserve balances and integrates that change into a specific subsection of the Federal Reserve Act.
The bill amends the Federal Reserve Act to prohibit Federal Reserve Banks from paying earnings on balances held by or on behalf of depository institutions except as allowed for required reserve balances.
In effect, it would eliminate interest paid on excess reserves (IOER).
The change is a narrow statutory restriction on a specific Fed operational tool and does not itself prescribe alternative monetary policy tools.
Narrow but institutionally consequential; lacks compromise, may trigger strong opposition from central-bank supporters and procedural barriers.
Relative to its intended legislative type, this bill is a concise statutory amendment that clearly states a prohibition on paying earnings on reserve balances and integrates that change into a specific subsection of the Federal Reserve Act. It lacks explanatory findings, an explicit implementation timeline, fiscal discussion, transitional rules, and accountability mechanisms.
Whether IOER is a bank 'subsidy' or a necessary Fed tool
These are examples from the analysis, not a ranked list of the most-affected groups.
Whether IOER is a bank 'subsidy' or a necessary Fed tool
Mainstream progressives would be divided.
Some favor removing what they view as a subsidy to big banks, but many worry that stripping a Fed tool could undermine inflation control and financial stability.
Centrists would emphasize pragmatic concerns about stability and Federal Reserve independence.
They would seek analysis on macroeconomic consequences and prefer a carefully designed transition rather than an abrupt prohibition.
Mainstream conservatives are likely to view this positively as limiting perceived corporate welfare and reining in Fed interventions.
Some may still worry about transitional effects on interest rates and markets.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Narrow but institutionally consequential; lacks compromise, may trigger strong opposition from central-bank supporters and procedural barriers.
The bill has not accumulated any surfaced votes yet.
Whether IOER is a bank 'subsidy' or a necessary Fed tool
Narrow but institutionally consequential; lacks compromise, may trigger strong opposition from central-bank supporters and procedural barri…
Relative to its intended legislative type, this bill is a concise statutory amendment that clearly states a prohibition on paying earnings on reserve balances and integrates that change into a specific subsection of the…
Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.