Prohibition on IOER Act of 2025

# Plain Language Summary: Prohibition on IOER Act of 2025 **What It Would Do** This bill would prevent the Federal Reserve from paying interest on excess reserve balances held by banks. Currently, banks can deposit extra money with the Federal Reserve and earn interest on those funds. This bill would eliminate that interest payment option, allowing the Fed to only pay interest on the minimum reserves banks are required to hold. **Who It Affects** The bill primarily affects banks and financial institutions that hold deposits with the Federal Reserve.

Indirectly, it could impact consumers and businesses that use banking services, since changes to how banks manage their money could affect lending practices and other financial services. The policy change could influence how much money banks choose to keep with the Federal Reserve versus lend out into the economy. **Current Status** The bill was introduced by Representative Warren Davidson (R-Ohio) in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives. It remains in the early stages of the legislative process.