Bill Details
HR.146 - 119th Congress
Status
Latest action
2025-01-03 - Referred to the House Committee on Financial Services.
Introduced Date
2025-01-03
Policy Area
Finance and Financial Sector
Committees
View committees (1)
Sponsors
8
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would stop Federal Reserve Banks from paying interest on bank reserves that are above the amount banks are legally required to hold. It changes the Federal Reserve Act so that only the required reserve balances can earn any authorized earnings, and it makes it a clear rule that Federal Reserve Banks may not pay interest on other balances kept by or for banks.
- Specifically revises the law that governs payment of earnings on reserve balances to focus on "required reserve" balances only.
- Says earnings may be paid only on reserves that banks are required to hold under the existing rules, not on extra or surplus balances.
- Adds a clear, explicit ban on paying interest or other earnings on any bank balances beyond those required reserves.
- Includes a technical rearrangement of the paragraph structure in the statute to reflect the new prohibition.
Official Summaries
Prohibition on IOER Act of 2025
This bill prohibits a Federal Reserve bank from paying interest to a depository institution on reserve balances in excess of minimum requirements.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 146 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 146
To amend the Federal Reserve Act to prohibit Federal reserve banks from
paying interest on excess reserves.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 3, 2025
Mr. Davidson introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Federal Reserve Act to prohibit Federal reserve banks from
paying interest on excess reserves.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prohibition on IOER Act of 2025''.
SEC. 2. PROHIBITION ON PAYMENT OF EARNINGS ON SURPLUS RESERVES.
Section 19(b)(12) of the Federal Reserve Act (12 U.S.C. 461(b)(12))
is amended--
(1) in the heading, by inserting ``required reserve''
before ``balances'';
(2) in subparagraph (A), by inserting after ``Balances''
the following: ``of reserves required to be maintained by a
depository institution under paragraph (2) that are'';
(3) by redesignating subparagraph (C) as subparagraph (D);
and
(4) by inserting after subparagraph (B) the following:
``(C) Prohibition on other earnings.--A Federal
reserve bank may not pay earnings on balances
maintained at a Federal reserve bank by or on behalf of
a depository institution except as provided under this
paragraph.''.
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