Sponsors
This bill increases transparency and constrains future Fed balance sheet growth to limit unconventional monetary interventions, but those constraints reduce the Fed's flexibility in crises and may raise costs and liquidity risks for banks, consumers, and markets.
Congress, taxpayers, and the public gain new annual reporting on how many foreign‑owned banks received Fed interest payments or used Fed lending facilities, increasing transparency and oversight of Fed actions.
All Americans could face a smaller future Federal Reserve balance sheet because the bill caps aggregate Reserve Bank assets at 10% of U.S. GDP (effective in 10 years), constraining the Fed's ability to expand holdings through large-scale asset purchases.
Depository institutions are required to hold at least the statutory reserve requirement floor tied to March 25, 2020 levels, which increases reserve needs compared with lower future settings and makes reserve policy more predictable.
Households, businesses, and financial markets could face deeper or prolonged downturns because capping Fed assets at 10% of GDP may meaningfully limit the Fed's ability to deploy large‑scale emergency balance sheet measures in severe recessions or financial crises.
Financial institutions and short-term funding markets lose the Overnight Reserve Repurchase Facility and similar tools, removing a liquidity backstop and increasing the risk of funding volatility and market disruption during short‑term stress.
Middle‑class families and small businesses may face higher costs because raising or fixing reserve requirement floors at March 25, 2020 levels can raise banks' funding costs that are often passed through via higher loan spreads or fees.
Based on analysis of 2 sections of legislative text.
Caps total Federal Reserve Bank assets at 10% of U.S. GDP (in 10 years), restores a March 25, 2020 reserve minimum, bans a short‑term repo facility, and requires annual Fed reports on foreign bank payments.
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 payments of interest on reserves and lending to foreign‑owned banks, restores the minimum reserve requirement to the level in effect on March 25, 2020, caps total Federal Reserve Bank assets at no more than 10% of U.S. GDP (effective 10 years after enactment), and orders the Board to eliminate the Overnight Reserve Repurchase Facility within one year and bar any similar facility. It also mandates yearly reports to Congress on how the Fed will meet these rules and timelines.