The Board of Governors of the Federal Reserve System ("FRB") issued a final rule to implement provisions of the Fixing America's Surface Transportation ("FAST") Act. The final rule amends Regulation I, which governs the issuance and cancellation of capital stock by the Reserve Banks. The text of the rule is the same as the interim final rule issued in February 2016.
The FAST Act reduced the dividend rate applicable to Reserve Bank depository institution stockholders with total assets of more than $10 billion (large member banks) to the lesser of 6 percent or the most recent 10-year Treasury auction rate prior to the dividend payment. The dividend rate for other member banks remains at 6 percent.
This rule, which takes effect January 1, 2017, also adjusts the treatment of accrued dividends when a Reserve Bank issues or cancels capital stock owned by a large member bank.
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