Large banks and other systemically important financial institutions will soon have to pay fees in order to help the government finance new regulatory powers created by the Dodd-Frank Act.
The Treasury Department recently proposed a rule that would determine the fee that will be collected from U.S. banks with more than $50 billion in assets, foreign banks with $50 billion in U.S. assets and any financial institution deemed by the government as significant to the security of the financial system, TheHill.com reports.
The law directs the fees to be spent on new entities such as the Financial Stability Oversight Council and the Office of Financial Research. Both offices are new branches of the Treasury that are tasked with collecting and analyzing financial data.
The Federal Deposit Insurance Corporation’s new liquidation powers will also be funded with the fees. These powers are an effort to eliminate the issue of “too big to fail” that financial experts have blamed on the 2008 financial crisis.
Banks and financial institutions that are forced to pay the fee will start in July and are expected to help the Treasury reap more than $100 million a year.
How much each entity will pay will not be determined until President Barack Obama releases his 2013 budget proposal.