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.