Sponsors
The bill increases transparency and attempts to limit long-term Fed balance-sheet growth to reduce fiscal risk, but those limits and related operational changes could weaken the Fed's crisis-response toolkit and tighten credit, raising the risk of deeper or prolonged economic pain for households and businesses.
Taxpayers and financial institutions: Caps the Federal Reserve's aggregate assets at 10% of GDP (effective in 10 years), constraining future large-scale balance-sheet expansion and reducing potential fiscal risks that could fall on taxpayers.
Taxpayers, financial institutions, and Congress/state governments: Requires the Fed and each Reserve Bank to report annually how many foreign-owned banks received interest on reserves or lending facilities and obliges the Fed to deliver an annual plan and timeline for complying with statutory limits—improving transparency and giving Congress actionable oversight.
Taxpayers and middle-class families: A statutory cap on the Fed's assets could limit the Fed's ability to respond to future financial crises or deep recessions, potentially prolonging downturns and increasing job and income losses.
Small-business owners and consumers: Raising the reserve requirement floor to March 25, 2020 levels would reduce banks' available funds and could tighten credit, increasing borrowing costs for businesses and households.
Financial institutions and taxpayers: Eliminating the Overnight Reserve Repurchase Facility and barring similar facilities removes a Fed tool for short-term liquidity management, which could increase market volatility during stress periods.
Based on analysis of 2 sections of legislative text.
Introduced May 7, 2025 by Richard Lynn Scott · Last progress May 7, 2025
Requires the Federal Reserve Board and each Reserve Bank to report annually on interest payments made to foreign-owned banks and other institutions, restores a reserve-requirement floor to the level in effect on March 25, 2020, caps total Federal Reserve System assets at 10% of U.S. GDP (effective 10 years after enactment), mandates elimination of the Overnight Reserve Repurchase Facility within one year and bars similar facilities, and compels the Board to submit a plan and timeline for implementing these changes within one year and annually thereafter. The changes limit certain Fed balance-sheet tools, increase disclosure about who receives interest on reserves and facility support, and create multi-year implementation deadlines and ongoing reporting obligations for the Federal Reserve System.