ABA and Seattle-based Washington Federal this afternoon filed suit in the Court of Federal Claims seeking relief for government actions that violate contracts with Federal Reserve member banks by reducing dividends paid to those institutions.
The Federal Reserve System paid $92 billion out of its annual net income to the U.S. Treasury in 2016, according to figures released today.
The Federal Reserve today published in the Federal Register a final rule implementing a controversial provision of last December’s highway bill that substantially cuts the dividends paid on the Federal Reserve Bank stock that national banks and other Fed member banks are required to hold.
In recent comments, Federal Reserve Bank of Richmond President Jeffrey Lacker challenged Congress’ decision to dramatically reduce the dividends the regional Federal Reserve banks pay to their member banks.
ABA today voiced strong opposition to December 2015 legislation that substantially cut the dividends paid on the Federal Reserve Bank stock that national banks and other Fed member banks are required to hold.
Reps. Randy Neugebauer (R-Texas) and Pete Sessions (R-Texas) yesterday introduced ABA-advocated legislation (H.R. 5027) that would alter the formula for capital that Federal Reserve member banks must hold with their regional Fed bank, potentially freeing up billions in “dead capital.”
The Federal Reserve today issued an interim final rule modifying Regulation I — which governs the capital stock issued by the regional Federal Reserve Banks — to conform to the dividend cuts passed by Congress in December’s highway spending bill.
The dividends that regional Federal Reserve Banks pay to member banks on the stock they are required to hold is a historically important part of attracting banks to join the Federal Reserve System and limiting the shadow banking sector, according to a research brief released today by the Federal Reserve Bank of Richmond.
Using Federal Reserve Bank dividends to pay for projects in the recently passed highway bill could set a precedent for Congress to use Fed accounts to bankroll other spending initiatives in the future, according to an Investor’s Business Daily editorial today.
A group of senators and representatives today issued a reconciled version of a long-term highway funding bill that includes a modified but still substantial cut to the dividends paid on the Federal Reserve Bank stock that national banks and other Fed member banks are required to hold.