Obama Administration Proposes Financial Crisis Responsibility Fee

Originally published January 15, 2010

Perhaps the biggest news in the financial world this week, overshadowing the announcements of exceptional bank profits, is the Financial Crisis Responsibility Fee (the "FCR Fee") proposed yesterday by President Obama. In this Alert, we provide a description of the President's proposal for the FCR Fee, a preliminary list of aspects of the proposed fee that require clarification and some potential reactions to the FCR Fee.

Overview Of The FCR Fee

The FCR Fee will work as follows:

• Covered Institutions. It will apply to institutions with assets of more than $50 billion. Covered institutions are those that were on January 14, 2010 (or thereafter became) insurance or other companies owning insured depository institutions; insured depository institutions; bank holding companies; thrift holding companies; and securities broker-dealers. The Economist estimates that the FCR Fee will be imposed on approximately 50 banks and