WHO IS GOING TO HAVE TO PAY THE FEES?
The intent is to apply the fee to the largest and most highly leveraged firms like bank and thrift holding companies, insured depositories and insurance companies, charging a fee on debts of firms with assets of $50 billion or more to try to deter them from excessive use of leverage.
The fee will apply not only to firms that got bailout money but also to others that did not, if they are big enough.
Broker-dealers with assets of $50 billion or more would also be charged the fee.
The White House estimates that over 60 percent of the fees will be paid by the 10 largest financial institutions.
Small community banks, which generally do not meet the $50-billion-dollar assets threshold, would not pay the fee.
Administration officials estimate that about 50 firms will have to pay it, around 35 U.S.-owned and the remainder of them U.S. subsidiaries of foreign-owned financial firms.
HOW MUCH IS THE FEE?
It will be set at about 15 basis points, or 0.15 percentage point, of covered liabilities. That will be determined by looking at total assets and subtracting tier one capital including common stock, disclosed reserves and retained earnings as well as Federal Deposit Insurance Corp-insured deposits at banks and policy reserves at insurance companies.
DOES THE PLAN INCLUDE SPECIAL CASES?
In the context of the bailouts, during which some firms got special help that spotlighted their distress, a few are being spared the fee despite the fact that there is anger at them.
U.S. automakers General Motors and Chrysler, which both went into bankruptcy during 2008 and got bailout money, will not have to pay because they are industrial companies and it is hard to measure their liabilities on the same basis as a bank.
Mortgage giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N), famed for paying their executives handsomely in the high-flying 1990s but driven into government conservatorship in 2008, will not be charged the fee because they now are essentially taxpayer-owned entities.
WILL THIS FEE LAST FOREVER, OR IS IT TEMPORARY?
The administration wants to keep it in place for 10 years, or as long as necessary to recover all TARP losses. President Barack Obama says he wants to ensure that "every single dime the American people are owed" comes back.
Over 10 years, the administration expects to raise $90 billion and officials think that will cover eventual costs of the bailout program.
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Trader disclosure: On January 14th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (AMAT) Calls; Pete Najarian Owns (CLF), Is Short (CLF) Calls; Pete Najarian Owns (HUM) Call Spread; Pete Najarian Owns (INTC) Call Spread; Pete Najarian Owns (MS); Pete Najarian Owns (PFE); Pete Najarian Owns (QCOM) Calls; Pete Najarian Owns (TCK), Is Short (TCK) Calls; Pete Najarian Owns (TXT) Call Spread; Pete Najarian Owns (XLF) Calls; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IYR), (MDY), (IWM), (USO), (UNG), (TLT), (BCR); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (CVS); Finerman's Firm Owns (MSFT), (TGT), (WMT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman's Firm And Finerman Own (GOOG); Terranova Is Long March British Pound Futures; Terranova is Long Copper Backwardation Futures: Long May 2010, Short July 2010; Terranova Owns (QCOM), (MSFT), (EMC), (FCX), (JPM), (FTO), (XOM), (BAC); Terranova Is Short (CMA), (JCI), (CAL), (ESS), (AGU), (ICE); Terranova Owns (POT) Feb. Puts; Terranova Owns (XHB) March Puts
For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Moshe Orenbuch:
(JPM) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (JPM) In Past 12 Months
Credit Suisse Provided Non-Invetment Banking Services To (JPM) In Past 12 Months
Credit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (JPM) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (JPM) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensatoin From (JPM) In Next 3 Months
Credit Suisse Has Received Non-Investment Banking Compensation From (JPM) In Past 12 Month
For Mike Khouw:
Cantor Fitzgerald & Co. Is A Market Maker In (INTC)
Cantor Fitzgerald & Co. Is A Market Maker In (TXN)
Cantor Fitzgerald & Co. Is A Market Maker In (AMAT)
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