WASHINGTON, D.C.— Today, Senator Rick Scott released a statement following an announcement from the Federal Reserve that it is immediately making the changes he called for to its Bank Term Funding Program (BTFP) and will terminate the program on March 11, 2024. The BTFP was created to help American businesses and families, but unfortunately, has been taken advantage of by big financial institutions which have used it to play the Fed and make money off American taxpayers. Before the Fed announced this change, financial institutions could borrow from the BTFP at a lower-than-market rate, below 5 percent, and then invest those borrowed funds overnight in reserves at the Federal Reserve. These reserves are paying a higher interest rate of 5.40 percent, allowing financial institutions to profit from the difference. Due to this issue and the gross mismanagement of this program, last week Senator Scott requested the program’s terms and conditions be changed or else be terminated immediately. 

Senator Rick Scott said, “This week, we are finally seeing some accountability from the Federal Reserve after I demanded important changes to its Bank Term Funding Program. It’s astonishing that the Federal Reserve failed to take steps sooner to fix this program, allowing big banks to game the system and profit off American taxpayers. Sadly, this gross mismanagement of the Fed is exactly what we’ve come to expect from Chair Powell. I am encouraged by the steps the Federal Reserve has finally taken to fix this program and look forward to further changes to its ill-advised programs and practices.”

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Read more about Senator Scott's efforts to force accountability at the Federal Reserve and the legislative package he is fighting to pass HERE. Read more about these proposals in the Senator’s Washington Examiner op-ed HERE.

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