Senate votes down ICBA-opposed amendment to ban interest on reserves

The Senate last week voted against adding an ICBA-opposed ban on interest on reserves to the National Defense Authorization Act.

Details: Senators voted 83-14 against an amendment sponsored by Sen. Rand Paul (R-Ky.) that would have banned the Federal Reserve from paying interest on reserves and the overnight reverse repo program.

ICBA View: ICBA and other groups released a position paper that says eliminating interest on reserves would likely cost the government money and significantly harm the economy by pushing up long-term interest rates, boosting the federal deficit, and curtailing the flow of credit to households and businesses.

Lobbying Success: ICBA successfully lobbied against the amendment with help from state groups such as the Mississippi Bankers Association.