Payments of $337 million to fund the Consumer Financial Protection Bureau (CFPB), and about $65.4 billion to the U.S. Treasury, were provided by the 12 Federal Reserve Banks last year, according to preliminary results issued by the Federal Reserve Board Thursday.
The Fed said the Treasury outlays included two lump-sum payments totaling approximately $3.2 billion to reduce aggregate Reserve Bank capital surplus to $6.8 billion. The reduction, the Fed said, was required under the Bipartisan Budget Act of 2018 (Budget Act) and the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155), which became law last spring.
In a release, the central bank said Reserve Bank net income was “derived primarily” from $112.3 billion in interest income on securities acquired through open market operations. Those included U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities, the Fed said.
On the expense side, the agency said it paid $38.5 billion in interest primarily associated with reserve balances held by banks and other depository institutions, and it incurred interest expense of $4.6 billion on securities sold under repurchase agreements.
Reserve Bank operating expenses, the agency said, were $4.3 billion (net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents).
The Reserve Banks covered expenses of $849 million for the costs related to producing, issuing, and retiring currency and $838 million for Federal Reserve Board expenditures. These were in addition to expenses covered for the CFPB.
Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2018