FOR IMMEDIATE RELEASE:
June 20th, 2025
Contact: Press_Paul@paul.senate.gov, 202-224-4343
Dr. Rand Paul Introduces “End the Fed’s Big Bank Bailout Act”
WASHINGTON, D.C. — U.S. Senator Rand Paul (R-KY) introduced the End the Fed’s Big Bank Bailout Act, legislation to prohibit the Federal Reserve from paying interest on balances held at Federal Reserve banks by or on behalf of depository institutions.
“Our country is over $36 trillion in debt,” said Dr. Paul. “But no one pays attention to the hundreds of billions of dollars the Federal Reserve unnecessarily paid to banks to NOT lend money to consumers.”
Until 2008, the Federal Reserve paid no interest to banks on reserve balances. That changed after the financial crisis, when Congress authorized the payments as a tool to control the money supply. From 2008 to 2016, interest payments averaged just $5 billion annually. But with the Fed’s rate now above 4 percent, these payments have exploded.
“In 2022, the Fed paid $60 billion to banks. In 2023, the Fed payments to banks rose to over $176 billion. And in 2024, the Fed’s subsidy to banks rose to about $186 billion. The Fed has been operating at a loss since September 2022,” Dr. Paul continued. “While the Fed no longer has profits and ceased returning those profits to the taxpayers by remitting those funds to the Treasury, it still, to this very day, pays what has amounted to hundreds of billions of dollars to banks.”
The End the Fed’s Big Bank Bailout Act amends Section 19 of the Federal Reserve Act to eliminate the Fed’s authority to make these interest payments. Senator Paul argues this simple change could save more than a trillion dollars over the next decade.
“At a time of persistent and self-imposed worsening losses at the Fed, the manipulators of the American economy continue to pay banks to do nothing but have their funds sit in a safe,” said Dr. Paul. “How can anybody, especially the populist Republicans and the entire Democratic Caucus, defend such a subsidy when supposed income inequality and the national debt is at the top of the political agenda?”
Read the bill HERE.
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