This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

20 Banks With the Highest Obama Fees

NEW YORK ( TheStreet) -- President Barack Obama's plan to limit the size and scope of commercial banks, announced Thursday, overshadowed an earlier proposal to charge fees to recoup the cost of the Troubled Asset Relief Program, or TARP.

What's clear is that Obama, who hasn't provided details of either plan, probably will need to lower or delay the fees as financial institutions are straining to post profits.

Fifty-two U.S. and foreign companies would be subject to the fees, according to SNL Financial. A table of the 20 that would pay the highest annual amounts are below.

SNL based its estimates on the fact sheet provided by the administration, with fees charged to "banks and thrifts, insurance and other companies that own insured depository institutions and broker-dealers" operating in the U.S. with at least $50 billion in assets.

The fees would be 15 basis points (0.15%) of "covered liabilities," defined as total assets excluding tier 1 capital and FDIC-assessed deposits or insurance policy reserves.

While the proposed Financial Crisis Responsibility Fee carries the laudable goal of "getting our money back" by collecting capital over 10 years to cover an estimated $117 billion in TARP costs, the uniform formula for assessing fees will have to be tweaked.

The fee would go into effect June 30. That's too soon for Citigroup (C - Get Report), which is still losing money, and for CIT Group (CIT - Get Report), which filed for bankruptcy in November and owes $2.3 billion.

Some companies that received TARP money won't be charged the fee. Recipients such as Goldman Sachs (GS - Get Report) will need to tread carefully, but the $50 billion cutoff on asset size seems arbitrary and could cause a backlash from the largest banks. After all, medium-sized regional banks such as Synovus (SNV - Get Report) may not have survived the crisis without government aid.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AIG $57.43 0.00%
C $53.07 0.00%
CIT $47.31 0.00%
FITB $18.90 0.00%
GS $197.35 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs