NEW YORK (

TheStreet

) --

Goldman Sachs

(GS) - Get Report

' efforts to repay a $5 billion preferred equity investment made by

Warren Buffett's

Berkshire Hathaway

(BRK.A) - Get Report

have hit a snag,

The Wall Street Journal

reported Monday.

Goldman must get approval for the move from the

Federal Reserve

, and the Fed is reluctant to okay it before clarifying its policies on bank dividends, the newspaper reported, citing anonymous sources.

At issue is the capital cushion regulators require banks to hold in the wake of the financial crisis. Goldman secured the Buffett investment in September 2008, arguably the scariest month of the crisis. Since then, banks including Goldman, have been conserving capital as they wait for clarity on what are widely understood to be tougher restrictions from regulators.

In recent weeks, however, regulators in the U.S. have indicated they will begin allowing banks to start raising their dividends again.

JPMorgan Chase

(JPM) - Get Report

,

Wells Fargo

(WFC) - Get Report

and

US Bancorp

(USB) - Get Report

are among the first institutions expected to raise dividends.

Like raising dividends, paying back Buffett would arguably deplete Goldman's capital, and so regulators don't want to give Goldman permission before they have ruled on the other banks, the report states. It also cites comments by Federal Reserve Governor Daniel Tarullo that the regulator's first approvals for higher dividends are likely to come in the first quarter of 2011.

Paying back Buffett would allow Goldman to stop paying him a hefty 10% annual dividend. Assuming regulators approve, Goldman can pay back Buffett at any time for $5.5 billion, though it would incur a charge of $1.6 billion for an early payback, the report states. In addition to the preferred stake, Buffett has warrants to buy up to 43.5 million shares of Goldman for $115 each before Oct. 1. Goldman shares were up .08% to $165.96 in early trading Monday.

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.