Banks Freak Out Over Obama Tax

NEW YORK (TheStreet) -- President Obama's plan to assess a $61 billion "Financial Crisis Responsibility Fee," unveiled Monday in his proposed budget to Congress, drew immediate criticism from the banking industry.

"The banking industry strongly opposes the $61 billion bank tax included in President Obama's budget proposal," read a letter from American Bankers Association President Frank Keating. "The industry is gravely concerned that this bad public policy will have unintended consequences that will damage our country's already weak economy."

The proposed fee, which would be assessed to financial firms with assets above $50 billion, made its first appearance in the White House's 2011 budget and was projected to raise $90 billion over 10 years, according to The Washington Post.

A year later, following mid-term election defeats for many Democrats and complaints that Obama was "anti-business," the White House reduced the proposal by two-thirds to just $30 billion. That number has risen to $61 billion in the current proposal, however.

The proposed tax would impact financial firms with assets of over $50 billion, a group that includes Bank of America(BAC),Citigroup(C) , JPMorgan Chase(JPM) and Wells Fargo(BAC), among others.

-- Written by Dan Freed in New York. Follow this writer on Twitter.

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