A transportation bill in Congress has put the U.S. well on the road to socialism, Dick Bove said Monday.

The bipartisan Senate bill, announced in July, would cut the dividend paid by the Federal Reserve to banks each year from 6 percent to 1.5 percent, and the difference would go toward funding highway projects



"The government has taken the position that, because they offer FDIC insurance, they have the right to invade banks," Rafferty Capital Markets' vice president of equity research told CNBC's "Squawk Box."

"Unfortunately, I believe the banks have been nationalized; I believe we're well on the road to socialism in terms of the way we're taking money flows out of the banking system and putting it into highways," he said.



Lawmakers said the bill could provide three years of funding for the nation's crumbling highways, bridges and rail systems.

"They are not only setting very tough regulations concerning how the banks function, but with the highway safety bill, what they're doing is saying 'we're going to take some of the revenues from the banks and use it to repair highways,'" Bove said.

