The Senate Banking Committee has added a new fee on big financial institutions to its legislative package of financial reforms, according to a source familiar with negotiations
The fee could generate as much as $50 billion to cover the costs of dealing with the collapse of so-called too-big-to-fail financial firms, rather than having taxpayers foot the bill, as was the case with the rescue packages of AIG and other big firms.
Though $50 billion is the current number on the table, it could be reduced to $20 billion, the source said
The House's version of the bill, passed late last year, calls for $150 billion in fees.
The fees would apply to only the biggest firms and would be closely tied to new regulatory authority covering the resolution, or wind down, of a firm's operations, if its failure were deemed to pose a threat to the overall financial system.
It's unclear on what basis—such as a percentage of assets or insured government deposits—the fees would be assessed.
The bank fee is the latest measure to be addressed by Senate negotiators led by committee chairman Chris Dodd (D-Conn.) and Bob Corker (R-Tenn.), who have working together on a bipartisan package for more than a month.
Earlier this week, negotiators agreed on a new regulatory structure for the supervision of banks, according to sources.
Under the plan, two current regulators, the Office of the Comptroller of the Currency and the Office of Thrift Supervision, would be merged into one entity, as is the case with the House bill.
The Federal Reserve would overesee only the nation's two dozen biggest banks, basically those with assets over $100 billion. Any banks thought to be a systemic risk would also be handled by the Fed.
The FDIC would have responsibility for state-chartered banks.
Government and industry sources say a draft of the bill could be made public as early as Friday, but next week is more likely. Aides to Dodd and Corker would not comment on a timeline.
Dodd spokeswoman Kirstin Brost said, "We are making progress but nothing's decided until everything's decided."
"We're still working, but we're not there yet," said Corker press secretary Laura Herzog.