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), which is still losing money, and for CIT Group ( CIT), 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) 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) may not have survived the crisis without government aid.

Some companies that didn't receive TARP money will be charged the fee. While they're not among the 20 companies that would pay the highest fees under the proposal, it's reasonable to expect a lobbying effort by insurance companies such as Prudential Financial ( PRU), Principal Financial ( PFG) and Allstate ( ALL) to avoid being lumped in with AIG ( AIG). Those insurers didn't accept TARP money, although they received approval to do so.

Hudson City Bancorp ( HCBK) is another example of a non-participant in TARP that may fight the fee.

The efforts of some companies to repay TARP will be hurt by the fee. While the projected annual fees aren't large in relation to the amount of TARP money owed, delaying the implementation of the fee until 2011 might work out better for the government, allowing faster repayment of TARP and pointing to a healthier outlook for large regional banks and the industry. Here are some examples:

For SunTrust ( STI), the estimated annual fee would be $53.6 million, while the bank owes $4.9 billion.

Regions Financial ( RF) would face an annual fee of $49.9 million and owes $3.5 billion.

For Fifth Third ( FITB), the annual fee would be $30 million, while the bank owes $3.4 billion.

KeyCorp ( KEY) would pay an annual fee of $28.4 million and owes the government $2.5 billion.

-- Reported by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.

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