The consolidated asset threshold in a Federal Reserve rule (Regulation I) that determines the dividend rate paid to Federal Reserve member banks will rise to $11.229 billion for 2022, according to a recent Federal Register notice.
The new threshold is up about 4 percent from the $10.785 billion threshold in effect this year.
All Federal Reserve member banks must, under the Federal Reserve Act (and Regulation I), subscribe to capital stock of their Federal Reserve District Banks. Member banks with assets at or below the consolidated asset threshold receive a 6% dividend on paid-in capital stock; those above the threshold receive a dividend equal to the lesser of 6% and “the rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend,” according to the final rule, which takes effect Jan. 7.
The act sets the threshold at $10 billion but requires an adjustment annually to reflect the change in the Gross Domestic Product Price Index published by the Bureau of Economic Analysis.