Is it true that Fed gets 6% dividend no matter what?
Edit. Found this.
Old Article from 2014...
https://newrepublic.com/article/116913/federal-reserve-dividends-most-outrageous-handout-banks
This Is the Fed's Most Brazen and Least Known Handout to Private Banks
David Dayen March 9, 2014
Rarely does a day go by when some House Republican doesn’t demand an end to Federal Reserve funding of the Consumer Financial Protection Bureau (CFPB). But you will never hear about the Fed’s direct subsidy to private banks that costs over three times as much as the total CFPB budget.
The subsidy comes in the form of a 6 percent dividend, paid on stock that over 2,900 banks purchase to participate in the Federal Reserve system. Very few places where ordinary Americans park their money offer such a risk-free benefit. In 2012 (the last year with available data), the Fed gave away $1.637 billion in dividends to banks, tax-free in the majority of cases. And the Fed has been doing this for the last 100 years. It’s one of the many unknown ways the Fed extends special benefits to Wall Street.
The dividends are one example of the strange manner in which the Fed is both a public and private entity. The Federal Reserve Board of Governors, the main policymaking body, is appointed by the President and confirmed by the Senate. But there are also twelve regional Federal Reserve Banks, whose presidents participate in the committee that sets monetary policy. These Reserve Banks operate as private corporations owned by member banks in their districts, even though they also regulate the same banks. Their websites have a .org, not a .gov, suffix.
Is it true that Fed gets 6% dividend no matter what?
Edit. Found this.
Old Article from 2014...
https://newrepublic.com/article/116913/federal-reserve-dividends-most-outrageous-handout-banks
This Is the Fed's Most Brazen and Least Known Handout to Private Banks
David Dayen March 9, 2014
Rarely does a day go by when some House Republican doesn’t demand an end to Federal Reserve funding of the Consumer Financial Protection Bureau (CFPB). But you will never hear about the Fed’s direct subsidy to private banks that costs over three times as much as the total CFPB budget.
The subsidy comes in the form of a 6 percent dividend, paid on stock that over 2,900 banks purchase to participate in the Federal Reserve system. Very few places where ordinary Americans park their money offer such a risk-free benefit. In 2012 (the last year with available data), the Fed gave away $1.637 billion in dividends to banks, tax-free in the majority of cases. And the Fed has been doing this for the last 100 years. It’s one of the many unknown ways the Fed extends special benefits to Wall Street.
The dividends are one example of the strange manner in which the Fed is both a public and private entity. The Federal Reserve Board of Governors, the main policymaking body, is appointed by the President and confirmed by the Senate. But there are also twelve regional Federal Reserve Banks, whose presidents participate in the committee that sets monetary policy. These Reserve Banks operate as private corporations owned by member banks in their districts, even though they also regulate the same banks. Their websites have a .org, not a .gov, suffix.
Is it true that Fed gets 6% dividend no matter what?