{"id":14970,"date":"2015-12-02T07:09:19","date_gmt":"2015-12-02T12:09:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14970"},"modified":"2015-12-02T07:09:19","modified_gmt":"2015-12-02T12:09:19","slug":"big-banks-suffer-rare-fail-as-congressional-deal-cuts-nearly-1-billion-a-year-in-handouts","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14970","title":{"rendered":"Big Banks Suffer Rare Fail as Congressional Deal Cuts Nearly $1 Billion a Year in Handouts"},"content":{"rendered":"
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Big Banks Suffer Rare Fail as Congressional Deal Cuts Nearly $1 Billion a Year in Handouts<\/a><\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Big banks will lose a portion of a multi-billion-dollar government handout they\u2019ve enjoyed for\u00a0over 100 years<\/a>, thanks to a compromise highway bill released Tuesday. One estimate pegged the loss to the banks at $8 billion to $9 billion over a 10-year time frame.<\/p>\n

The bill, as it emerged from a House-Senate conference committee, pays for roads, bridges and mass transit projects in part by reducing what is currently a 6 percent annual dividend on stock that the big banks buy to become members of the Federal Reserve system.<\/p>\n

Fed membership offers many perks, from access to processing payments to cheap borrowing. But the dividend could be the sweetest gift, because banks cannot ever lose money on the stock; they\u2019re even paid out if their regional Fed bank disbands.<\/p>\n

Despite the total lack of risk, member banks have received the 6 percent dividend payout every year since 1913.<\/p>\n

So for example, JPMorgan Chase, which has held stock since then, has made back their investment six times over without risking any loss. And if the bank stock was in place before 1942, that dividend payment is tax-free.<\/p>\n

Originally \u2013 that is, 100 years ago \u2014 the Fed offered the dividend to entice banks into the new Federal Reserve system. But nationally chartered banks are today required by law to become members, and all banks must abide by the standards of membership. So the dividend is just a vestigial sweetener that never went away, pumping billions of dollars in public money to the banks for no discernible reason.<\/p>\n

After a report\u00a0I did in March 2014<\/a>\u00a0about this brazen handout to Wall Street, the Congressional Progressive Caucus\u00a0included a cut<\/a>\u00a0to the dividend in their annual budget proposal. That budget\u00a0didn\u2019t pass<\/a>, but when Senate leaders searched for ways to fund highway spending, Barbara Boxer \u2013 the ranking Democrat on the Senate Environment and Public Works Committee, which handles the highway bill \u2013\u00a0drew upon<\/a>\u00a0the Progressive Caucus measure.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Big Banks Suffer Rare Fail as Congressional Deal Cuts Nearly $1 Billion a Year in Handouts Big banks will lose a portion of a multi-billion-dollar government handout they\u2019ve enjoyed for\u00a0over 100 years, thanks to a compromise highway bill released Tuesday. One estimate pegged the loss to the banks at $8 billion to $9 billion over […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5270,303,305,5567,1796,10893],"class_list":["post-14970","post","type-post","status-publish","format-standard","hentry","category-economics","tag-big-banks","tag-fed","tag-federal-reserve","tag-the-intercept","tag-us-congress","tag-us-highway-bill"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14970"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14970\/revisions"}],"predecessor-version":[{"id":14971,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14970\/revisions\/14971"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}