Dividends on Federal Reserve Stock Fully Restored for Smaller Community Banks, Higher G-Fees Eliminated.
An earlier version of the highway bill contained a steep cut in the dividend paid on Federal Reserve stock, from 6 percent to 1.5 percent, for member banks with assets of more than $1 billion. The bill also would have extended higher guarantee fees on loans sold to Fannie Mae and Freddie Mac. Both of these provisions were included to offset the cost of new transportation spending. As a direct result of ICBSD and ICBA advocacy, an effective grass roots campaign, and the coordinated support of 43 state-based community bank associations, the final bill completely eliminated the higher guarantee fee provision and significantly modified the Federal Reserve stock provision by creating an exemption for banks with assets of less than $10 billion and linking the dividend rate to the 10-year Treasury note. ICBSD and ICBA had advocated for elimination of the reduction in the dividend rate for banks of all sizes.