End the Fed’s Big Bank Bailout Act

S. 2113 would amend the Federal Reserve Act to eliminate the Federal Reserve's authority to pay interest on balances that banks and other depository institutions maintain at Federal Reserve banks. Currently, the Fed pays interest on these reserve balances, a practice that began after the 2008 financial crisis as a tool to manage the money supply. The bill's sponsor argues this would save taxpayers money by ending what he characterizes as subsidies to large financial institutions.

If enacted, the bill would remove the existing provision allowing such interest payments. Supporters contend that the Fed has paid hundreds of billions of dollars in interest to banks over recent years, with payments reaching $60 billion in 2022 alone. The bill would eliminate these payments entirely, which could affect how banks manage their reserves and interact with the Federal Reserve's monetary policy operations. The legislation is currently in the early stages and has not yet advanced beyond committee hearings.