Press Releases

Today, Monetary Policy & Trade Subcommittee Chairman Bill Huizenga (MI-02) and Congressman Bill Foster (IL-11) sent a letter to Speaker Boehner, Majority Leader McCarthy, Leader Pelosi, and Whip Hoyer calling on leaders in both parties to withhold consideration of any proposals to modify dividend payments on Federal Reserve stock until the Government Accountability Office (GAO) and the committees of jurisdiction have had time to study the long-term implications of any such policy change.

Signed by 103 Republicans and 47 Democrats, this bipartisan letter builds upon several substantive questions regarding the structure of the Federal Reserve System that have been raised by House Financial Services Committee Chairman Jeb Hensarling:

“Consistent with that, the Chairman of the Financial Services Committee has written to the Government Accountability Office (GAO) to request a study of the policy, the historic rationale for requiring member banks to hold Federal Reserve Bank stock, the federal budgetary implications of reducing the six percent dividend rate, and broader questions such as whether member bank ownership of Federal Reserve Bank stock should be voluntary rather than mandatory and whether the stock itself should be permanently retired. Until GAO completes its work and the congressional committees of jurisdiction have an opportunity to review the significant public policy questions at issue, we believe that changes to the Federal Reserve dividend rate are premature.”

The Huizenga/Foster letter also expresses concern for the “unintended consequences” of any changes made to the Fed dividend structure without proper study and evaluation as noted by Federal Reserve Chair Janet Yellen:

“We believe that any potential modifications to the current stockownership structure of the Federal Reserve Banks should be thoroughly studied and analyzed to help ensure that Congress understands the policy implications of any changes. In fact, when testifying before the Senate Banking Committee in July, Federal Reserve Chair Yellen stated that the change ‘could conceivably have unintended consequences’ and that ‘it deserves some serious thought and analysis.’”

The entire letter, including a list of members who signed, is available here.