On Senate Floor, Warren Urges Colleagues to Prohibit Fed from Cutting Checks to Big Banks At the Expense of American Families

On Senate Floor, Warren Urges Colleagues to Prohibit Fed from Cutting Checks to Big Banks At the Expense of American Families

"The banking industry does not need a subsidy from the Federal Reserve and this bipartisan proposal would end it."

"Today's vote is just the start of a bipartisan fight to get this bill signed into law."

Watch Speech Here (YouTube)

Washington, D.C. - Today on the Senate floor, U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, urged her Senate colleagues to support Chairman of the Senate Committee on Homeland Security and Governmental Affairs Chairman Rand Paul's (R-KY) amendment to prohibit the Fed from cutting interest checks to banks and shadow banks.

In her remarks, Ranking Member Warren spoke out against subsidizing the financial sector at the expense of American families.

Below are Ranking Member Warren's remarks as delivered:

Senator Warren: Mr. President, during the 2008 financial crisis and the $700 billion bailout for giant banks, the Federal Reserve exploited another authority to shovel money out the back door and into the hands of those giant banks.

For the first time ever, the Fed started paying interest on overnight funds that big financial institutions deposit with the Fed. This was a dream-come-true for those financial giants-no risk and lots of free money printed by the Fed.

How much money? $785 billion since 2008. Some of that money could have been used to pay down the national debt or fund tax cuts or whatever Congress wanted. Instead, public money went straight into the pockets of giant banks.

And the Fed has a very convoluted argument about why they should be allowed to pay interest, claiming it helps them set interest rates, but no one is fooled. Before 2008, the Fed managed interest rates while paying zero on overnight funds-and never had a problem. Let's call this out for what it is-another taxpayer subsidy for giant banks.

If another emergency happens and the Fed needs authority to lend out money like that, make them come to Congress and we'll get a vote on it.

Last year alone, banks earned about $270 billion in profits. Jamie Dimon made $39 million. Other megabank CEOs made at least $30 million. The banking industry does not need another subsidy from American taxpayers. This bipartisan proposal would end that subsidy.

I urge a Yes vote on Paul 3761.

And understand, today's vote is just the start of a bipartisan fight to get this bill signed into law.

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