With a provision that would reduce the dividends paid on Federal Reserve Bank stock to Fed member banks still being floated as a revenue-raising measure on Capitol Hill, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) today asked the Government Accountability Office to study the Fed stock ownership structure and report back to Congress.
Specifically, Hensarling asked the GAO to review the historic rationale for requiring Fed member banks to buy stock and why Congress set a 6 percent dividend; the implications of reducing that rate, both on the federal budget and on Fed system membership; the implications of making stock purchases voluntary; and the implications of “permanently retiring Federal Reserve Bank stock.”
ABA has strongly opposed congressional attempts to reduce the Fed stock dividend to pay for temporary and unrelated expenses, especially without any prior study or analysis.
