Big banks get a lot of free money from the federal government. And their lobbyists think they have a constitutional right to it.

Each year, the government pays billions of dollars to banks to thank them for being part of the Federal Reserve system. These payments aren’t structured to influence or encourage any particular business activity — banks just get straight cash, no matter what they do. The subsidy is economically useless. It doesn’t push interest rates lower or boost pay for bank tellers or help more farmers qualify for loans. The money just goes straight to the bottom line, boosting bank profits.

Late last year, Congress passed a law limiting these payouts, using the savings to help pay for a highway bill. While lawmakers originally proposed trimming the subsidy by $17 billion over five years, the legislation ultimately only cost banks $2.7 billion, thanks to a late compromise that allowed smaller banks to keep receiving full payment. Since the subsidies are scaled to the size of each bank, the lion’s share of the $2.7 billion will come from a small number of big firms.

The top lobbyist for the American Bankers Association wrote a letter to the Fed last week calling the subsidy cuts “an unconstitutional taking of member banks’ property without compensation.”

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