End the Fed’s Big Bank Bailout Act

Key Points

• This bill would stop Federal Reserve banks from paying earnings (interest) on money banks keep parked at the Fed.
• Supporters argue this would reduce what they see as a subsidy to big banks and could push banks to use more money for loans instead of holding it at the Fed.
• Banks could earn less from simply holding balances at the Fed, which may change how they manage cash and could affect some bank profits.
• The change could ripple into how short-term interest rates are managed, since paying interest on these balances is one tool the Fed uses to steer rates.