Prohibition on IOER Act of 2025

This bill would stop Federal Reserve banks from paying interest to banks and similar institutions on the money they keep at the Fed beyond what’s required. In short, it ends interest on “excess reserves” held by depository institutions. The text also adds a general rule that Federal Reserve banks may not pay earnings on these balances except as allowed under the same section of law.

Key points:

• Who is affected: Banks and other depository institutions that hold extra reserve balances at the Federal Reserve.
• What changes: The Fed would be prohibited from paying interest on excess reserves; a broader ban on paying earnings on such balances is added, except as otherwise permitted in that section.
• When: This describes what the bill would do if enacted; no effective date details are provided here.