Prohibition on IOER Act of 2025

HR 146, the Prohibition on IOER Act of 2025, prohibits the Federal Reserve from paying interest on reserves that banks are required to hold as part of their regulatory requirements. It directly affects depository institutions (banks) that maintain these required reserves at Federal Reserve banks. The bill amends the Federal Reserve Act to remove the current practice of paying interest on such balances, specifically banning interest payments except as explicitly allowed under the new provisions. This changes how banks are compensated for holding legally mandated reserves, shifting away from the existing interest-on-excess-reserves (IOER) policy.