Latest News Tagged With “dividends”

Hensarling Request GAO Study Reducing Dividends

Sep 12, 2015

With a provision in the Highway Trust Fund reauthorization bill that would reduce the dividends paid on Federal Reserve Bank stock to Federal member banks still being floated as a revenue-raising measure on Capitol Hill, House Financial Services Committee Chairman Jeb Hensarling (R-TX) has asked the Government Accountability Office (GAO) to study the implications of reducing the annual dividend rate that the Federal Reserve pays to member banks. “Hensarling asked GAO to study the historical rationale for the arrangement, the historic rates of return on other government securities, the budget and policy ramifications of reducing the annual dividend or changing it to a floating reference rate and the impact of making the system voluntary instead of mandatory.” “I ask that the GAO engage with all relevant public and private sectors stakeholders, including, but not limited to, relevant federal and state regulatory authorities and affected banking organizations of all sizes.” Hensarling wrote in a Sept. 10 letter to Comptroller General Gene Dodaro. Hensarling-Letter-Fed-Dividend    Read more

Congressional Letter on Capital & Tax Treatment of Sub S Banks

Oct 21, 2014

Below, please find a link to the Congressional Letter signed by 43 Congressional Representatives over the continued concern over the capital and tax treatment of Subchapter S Banks. In particular, they ask that steps are taken to level the playing field between S Corp banks and C Corp banks in regards to Basel III capital conservation buffer rules. Read the Letter  Read more

Yellen Response to Subchapter S Bank Association Basel III Letter

Jul 29, 2014

Attached, please find the response from the Board of Governors of the Federal Reserve System in response to the letter we sent regarding treatment of Subchapter S Banks tax treatment  compared to C Corp banks.  Read more

FDIC Releases Guidance for S Corporation Banks

Jul 22, 2014

The FDIC, yesterday afternoon, issued guidance outlining the circumstances under which the Agency would approve an S corporation bank's request for relief from the dividend restrictions imposed under the Basel III capital conservation buffer. Exceptions will generally be granted to 1- and 2- rated banks which are adequately capitalized and are not subject to a written supervisory directive. While the guidance only applies to capital conservation buffer considerations, it does recognize that there may be other circumstances such as a bank returning to a healthy condition that might present circumstances where a dividend exception could be granted. The Agency noted that it does not expect the concern to be an issue for some time as a result of the three year phase-in through 2019. We are pleased that the FDIC recognizes the unique circumstances under which S corporation banks operate and hope this guidance will result in greater recognition and willingness by the Agencies to consider case by case dividend approvals to pay taxes in a broader set of circumstances, beyond the capital conservation buffer issue. Importantly, the Agency recognizes that the ability to pay dividends is a crucial element of an S corporation bank's capital access strategy.  A more detailed description of the issuance follows.  Read more