There is no mistaking the President’s intentions in proposing the Financial Crisis Responsibility Fee. He has stated “My commitment is to recover every single dime the American people are owed. And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people — who have not been made whole, and who continue to face real hardship in this recession.”

The bank tax as it is being called will be levied only on the largest financial corporations, defined as those with combined assets across all their controlling interests that amount to more than $50 billion. When this is taken into consideration, the statistics reveal that the majority of the tax revenue (about 60%) will come from the top 10 largest firms.

The Opposition to the Tax.

Of course a tax of this nature is bound to draw severe criticism from those likely to be affected by it. The banks argue that they have in fact already repaid the sums borrowed under the TARP (Troubled Asset Relief Program) and point the finger at the car industry which continues to struggle to keep its business intact.

In fact there seemed to be a mad rush to repay those TARP funds that the financial industry so desperately needed only a short time ago. The major players J.P. Morgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Bank of America were all trying to rush each other to the head of the line in December 2009 to repay the money owed and all this a whopping two years ahead of the deadline.

The logical question to ask is “why was the TARP money repaid early?” The only answer that makes sense seems to be because it would look bad if banking executives continued to be paid millions in bonuses while the debt was outstanding.

What Does This Mean for Consumers?

The American consumer must take those facts into consideration and try to make sense of them. The banks are angry about the Financial Responsibility Fee that came as a result of their bonus payments and they warn that the tax can be passed on to consumers in the form of lower interest on deposits, higher interest on loans and higher or additional fees. The government counters this argument by highlighting that that tax will only be levied on the largest of the banks so taking this route would only make them less competitive.

The affected banks are in talks to pursue legal action against the tax and simply will not take it lying down.

In the meantime the consumer should be on the lookout for sneaky increases and cut backs on services that were once free. Shopping around for the best rate and price will continue to be the best way to save money in the future.