WASHINGTON, D.C. – Today, Senator Rick Scott and Senator Ted Cruz introduced the Fiscal Accountability for Interest on Reserves (FAIR) Act to stop the Federal Reserve from paying banks interest on their reserves. In 2024 alone, the Fed paid more than $186 billion in interest payments to banks through this Interest on Reserve Balances program and is expected to pay out more than $1 trillion over the next 10 years to banks. The grossly mismanaged Federal Reserve has been operating at a loss since 2022 with zero dollars remitted to the U.S. Treasury and back to the American people, while wasting billions on interest payments to banks and multi-billion dollar building renovations. Congressman Warren Davidson is leading the companion legislation in the House of Representatives.

Senator Scott has previously led various bills to hold the Federal Reserve accountable including a legislative package containing his: Regular Order For Investments (ROI) of the Federal Reserve Act, Right Size the Federal Reserve Act, Rein in the Federal Reserve Act, as well as a bipartisan bill that would require an independent, presidentially-appointed and Senate-confirmed Inspector General, and most recently the Federal Reserve Transparency Act which will require a full audit of the Fed’s Board of Governors and the regional Federal Reserve banks. Senator Scott previously called for accountability at the Federal Reserve in a letter to Chairman Powell discussing the need to hold Federal Reserve employees accountable amid numerous ethics concerns, insider trading, and bank failures. Earlier this year, Senator Scott also wrote an op-ed in Fox News, further exposing Jay Powell’s failures to American families as chair of the Federal Reserve.

Senator Rick Scott said, “The Federal Reserve under Jay Powell’s leadership has been a failure to the American people – it has failed to provide the stability, transparency or accountability Americans deserve from the central bank, and has failed to use dollars in the best interests of the American people. Our bill, the FAIR Act is a great step to refocusing the Fed on American families by stopping their ability to pay interests to banks on reserves when these dollars could be used to fund the government, benefit American families, and pay down the nation’s $37 trillion debt crisis. Jay Powell has already downplayed inflation, rubber-stamped reckless policies, and has fostered a culture of corruption and mismanagement costing taxpayers trillions, while putting the interests of all others before American families. We must force change at the Federal Reserve to put families’ best interest first, bring accountability to the Federal Reserve, and restore fiscal sanity to the nation – my FAIR Act is a great step and I urge my colleagues to pass this ASAP.”

Senator Ted Cruz said, “The Federal Reserve’s authority to pay interest on reserves rewards big banks—including large foreign banks—at the expense of all Americans. The FAIR Act replaces this authority—reducing the deficit, allowing more small businesses to access capital, and putting the Fed back on a path of fiscal responsibility. The Fed should not be in the business of increasing foreign banks’ profits, and I strongly urge my colleagues to pass this bill without delay.”

Congressman Warren Davidson said, “The Federal Reserve should not pay interest on banks' reserves. It robs the Treasury, and perhaps worse, it distorts markets. If banks want returns, they should deploy their capital by making loans. Market economies need capital, not central planning. I'm glad to sponsor the House version of the Fiscal Accountability for Interest on Reserves Act to end this nonsensical practice.”

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