In her visit to Capitol Hill last week, Federal Reserve Board Chair Janet Yellen reported that the Fed remitted $117 billion in 2015 to the U.S. government. What she did not mention in her testimony was that $19.3 billion of that total represented a one-time handover of most of the Fed's accumulated surplus or capital. The remaining $97.7 billion represented the Fed's net income for the year.

This $19.3 billion raid on the capital base of the nation's central bank was accomplished by the insertion of a little-noticed provision in last year's highway funding bill enacted by Congress. The Fixing America's Surface Transportation Act – or FAST Act – amended the Federal Reserve Act to order the central bank to transfer all surplus capital in excess of $10 billion to the U.S. Treasury to help pay for transportation infrastructure improvements. With that simple provision hidden in a transportation bill, the government took two-thirds of the Fed's capital funds, stripping the Fed of much of its net worth.

This action made the Federal Reserve banks some of the least well-capitalized financial institutions in the country. Given the size of the Federal Reserve System's balance sheet of $4.5 trillion, a cap on the surplus account of only $10 billion amounts to a paltry 0.2% of the Fed's total balance sheet. Even if one adds the $30 billion of paid-in capital owned by the member banks, the total capital stock of the entire Federal Reserve System is now less than $40 billion – still less than 1% of the Fed's balance sheet. No private bank would be allowed to continue in business with such meager capital reserves.

Two potential issues are likely further to tax the capital resources of the Fed in the near future. For one, as Yellen told members of both the House and Senate, the Fed now pays interest on the excess reserves held by banks at the Fed. At present, member banks hold approximately $2.5 trillion in such excess reserve balances. As the Fed is expected to raise the federal funds rate to a more normal level of about 4% in future years, the central bank will have to pay approximately $100 billion per year to the commercial banks as interest on their reserves – thereby eliminating the typical Federal Reserve surplus. Think of the potential political firestorms that will erupt as commercial banks are paid an amount equivalent to $100 billion per year that could otherwise be used to shore up federal resources.

Second, as interest rates rise in future years, the market value of the Fed's $4.2 trillion portfolio of securities will decrease. This potential loss in market value could amount to many billions of dollars. Undoubtedly, the Fed will avoid marking its portfolio to true market values, thereby keeping the true capital loss problem hidden from the public. Otherwise, that enormous loss in book value would totally wipe out the Fed's meager $10 billion capital base.

The Federal Reserve System was set up as an independent central bank over 100 years ago. That independence is being tested severely as the federal government uses the Fed now as its own cash cow. Stripping the Fed of most of its capital base has made the most important central bank in the world – and the backbone of the U.S. financial system – one of the least well-capitalized financial institutions in the nation.

Robert Heller is a former governor on the Federal Reserve Board and a former president of Visa. He is the author of The Unlikely Governor: An American Immigrant's Journey from Wartime Germany to the Federal Reserve Board.