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U.S bank dividends are approaching the all-time high

By on June 22, 2017

In an attempt to restart the dormant U.S. economy, House republicans are passing a bill that will undermine many of the Dodd-Frank safeguards.

22 Jun 2017 – CNN Money

But banks have more cash than they know what to do with these days. American banks raked in record profits last year.

More tellingly, banks handed out $102.8 billion in dividends to shareholders in 2016, according to the FDIC. That’s the third-highest amount on record, going back to 1984. It is just shy of the all-time high of $110.4 billion shelled out in 2007, the year before the financial meltdown.

Bank dividends crumbled in half in 2008, sinking to $51.1 billion, FDIC stats show. But they rebounded steadily following that, even after Congress passed Dodd-Frank in 2010.

“Banks have plenty of extra money for expanding their lending. They choose not to lend that money, instead ‘returning capital’ to their shareholders,” Cornell University law professor Saule Omarova told the Senate banking committee last week.

But banks have more cash than they know what to do with these days. American banks raked in record profits last year. More tellingly, banks handed out $102.8 billion in dividends to shareholders in 2016, according to the FDIC.

 

That’s the third-highest amount on record, going back to 1984. It is just shy of the all-time high of $110.4 billion shelled out in 2007, the year before the financial meltdown. Bank dividends crumbled in half in 2008, sinking to $51.1 billion, FDIC stats show.

 

But they rebounded steadily following that, even after Congress passed Dodd-Frank in 2010. “Banks have plenty of extra money for expanding their lending. They choose not to lend that money, instead ‘returning capital’ to their shareholders,” Cornell University law professor Saule Omarova told the Senate banking committee last week.

 

The financial industry has pushed for relaxed regulation. The Financial Services Roundtable, a lobbying group for big banks, wrote a letter to Senate leaders in April arguing that needless regulation “takes capital away from small business loans, home purchases and other productive uses.”

 

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