This doesn't sound right. The markets are populated with people who will invest hundreds of millions of dollars to outcompete other firms for sub-penny advantages on trades, and, contrary to popular belief, the largest and most successful of those firms are not making so much money that they're upending the finance industry.

So if somebody is making 8% for doing "absolutely nothing", can you explain why somebody else isn't taking them to the cleaners by offering to do the same nothing for 7.9%?

That's because the interest rate is set by Congress. Captive audience.

In essence, there's no reason to.

It's not true that there's zero risk. As they say - "you can't get blood from a stone".

There are plenty of people who just don't pay their loans and make so little money there is no realistic recourse for the banks.

Unfortunately, the recourse is a lifetime of garnishment. That may (and can) include garnishment of Social Security.

That 0.25% is for a 24-72 hour loan, not for a multi-year loan. If you spread it out, that's a 25% yearly interest rate. You want that rate?