FOR IMMEDIATE RELEASE:

October 9th, 2025

 Contact: Press_Paul@paul.senate.gov, 202-224-4343

Dr. Rand Paul Offers Amendment to 2026 NDAA to End the Fed’s Big Bank Bailouts

WASHINGTON, D.C. – U.S. Senator Rand Paul (R-Ky.) announced he is offering his bipartisan bill, the End the Fed’s Big Bank Bailout Act (S.2113), as an amendment to the 2026 National Defense Authorization Act (NDAA) to end the Federal Reserve’s authority to pay banks interest on reserves. This policy has cost taxpayers hundreds of billions of dollars while punishing Main Street and rewarding Wall Street.

“Our country is over $37 trillion in debt, yet the Fed has paid hundreds of billions to banks to keep money idle. While it runs losses and no longer sends profits back to taxpayers, it keeps funneling cash to banks for doing nothing” said Dr. Paul. “We want to end the Federal Reserve’s twin types of interest payments that act as subsidies for big banks: Interest on Reserve Balances (IORB) and the Overnight Reverse Repurchase Agreement (ONRRP). Together, these two subsidies have cost taxpayers more than half a trillion dollars in just the last five years.”

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.

The payments averaged $5 billion annually from 2008 to 2016. But with the Fed’s rate now above 4 percent, these payments have ballooned at nearly $200 billion in three years, costing taxpayers tens of billions of dollars each year. Meanwhile, the Fed itself operates at a loss.

“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.

This amendment is up for consideration by the Senate later today.

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