A Senate bill to fund highway construction would be paid for partly by slashing the dividend the Federal Reserve System pays to member banks.

The Developing a Reliable and Innovative Vision for the Economy, or DRIVE, Act announced by Senate Majority Leader Mitch McConnell Tuesday would be funded with $16.3 billion in funds from the Federal Reserve that would be saved by paying its larger member banks a 1.5 percent fixed dividend, rather than 6 percent.

The Fed, a unique public-private institution, has paid the 6 percent dividend to member banks that own shares in the 12 regional Fed banks for the better part of a century.

That payment is "overly generous," according to a fact sheet provided by McConnell's office. Banks with less than $1 billion in assets would continue to receive the 6 percent dividend.

The cut to the dividend is the largest of a number of unrelated measures to cut spending or boost revenue included in the bill to pay for highway spending.

It is sure to be opposed by banks that stand to lose directly on the payments.

Federal Reserve Chairwoman Janet Yellen also expressed skepticism about using the funds to fund highway spending in congressional testimony last week, telling Senate Banking Committee Chairman Richard Shelby, R-Ala., that she worried about the "unintended consequences" of lowering the dividend. Shelby also indicated opposition to using the dividend as a pay-for.