This Is the Fed's Most Brazen and Least Known Handout to Private Banks

[LibertyEagle]

This Is the Fed's Most Brazen and Least Known Handout to Private Banks
BY DAVID DAYEN

3/9/14

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.

read the rest...

[Zippyjuan]

About that dividend the Fed pays to member banks. To join the Federal Reserve system, a bank must buy membership shares. The value of those shares is equal to ten percent of their assets- a bank with $100 million in assets must pay the Fed $10 milllion to join. The bank is then paid a six percent a year dividend on those shares (which are not like stock shares in a company- they can't be traded or sold and have no rights like voting rights). In our example, this bank would get $600,000 of their money back a year. To call it a "handout" is a bit of an exaggeration.

[surf]

To call it a "handout" is a bit of an exaggeration.

6%? in this rate environment, that is pretty much a "handout."

[jkr]

and this belongs here!



just that beginning note and scene sends chills up my spine!

i luv it

[jkr]

To call it a "handout" is a bit of an exaggeration.

respectfully

if its all fiat, it is EXACTLY a handout from an inside game fueled by the time of every other human that % is extracted from ( by various means)

scale doesnt matter, its what you do with the power

[ctiger2]

Bribes

[Dianne]

Sorry, until they begin drug testing the "PRESIDENT?",

This entire fricken Congress and the Administrative Branch are high, all of the time. Since when didn't Presidents go in for their annual check up's ? Obama, who can't even spell "RESPECT", hasn't had one annual physical that I know of ..

These guys are drugged up the ass, and so addicted they will kill you, they will steal your property, they will allow your daughters to be raped to serve their addictions.

You want action???? DEMAND DRUG TESTING IN THE CONGRESS AND THE WHITE HOUSE !!!!

[enoch150]

About that dividend the Fed pays to member banks. To join the Federal Reserve system, a bank must buy membership shares. The value of those shares is equal to ten percent of their assets- a bank with $100 million in assets must pay the Fed $10 milllion to join. The bank is then paid a six percent a year dividend on those shares (which are not like stock shares in a company- they can't be traded or sold and have no rights like voting rights). In our example, this bank would get $600,000 of their money back a year. To call it a "handout" is a bit of an exaggeration.

What happens after 16 years?

[Zippyjuan]

They still receive their dividends (yes- I note you got the payback period calculated- rule of 72 divided by interest rate- thanks!). The dividend rate was mandated by Congress.

[enoch150]

It's not compounded, so no rule of 72.

[kcchiefs6465]

Bump.