FAIR Act
The FAIR Act would amend the Federal Reserve Act by striking Section 19(b)(12), the provision that currently governs earnings on balances. In practical terms, the bill removes a specific statutory rule related to how earnings on balances are treated under the Fed’s authority. The amendment would take effect 180 days after enactment. The bill is introduced in the Senate by Sen. Rick Scott (FL) and Sen. Ted Cruz (TX), and referred to the Committee on Banking, Housing, and Urban Affairs. Its short title is the Fiscal Accountability for Interest on Reserves Act, or the FAIR Act. Because the full text only states that paragraph (12) of Section 19(b) is being struck, the exact operational impact depends on the broader context of how earnings on reserve balances are currently handled in law and how the Federal Reserve would manage those earnings once that paragraph is removed.
Key Points
- 1Short title: This act is called the Fiscal Accountability for Interest on Reserves Act, or the FAIR Act.
- 2What changes: It amends the Federal Reserve Act by striking paragraph (12) of Section 19(b) (the provision relating to earnings on balances).
- 3Effective date: The amendment takes effect 180 days after enactment.
- 4Sponsors and process: Introduced in the Senate by Sen. Scott of Florida (for himself and Sen. Cruz) and referred to the Committee on Banking, Housing, and Urban Affairs.
- 5Scope of change: Removes a specific statutory provision governing earnings on balances; does not, in the text provided, replace it with an alternative rule.