During his most recent weekly address, President Obama had scathing words for the banking industry after word of the most recent extravagant bonuses hit the media. Despite the fact that these banks needed bailout TARP funding to keep their doors open, they still reported billions of dollars in profit and record bonus payouts.
The president essentially laid blame for the current job crisis on the doorsteps of these large banks. As unemployment crept up and more businesses closed their doors, many looked at the careless risks that some of these financial institutions took. Had these risks not been taken then perhaps we’d be facing a much different economic situation.
“But even as we work tirelessly to dig our way out of this hole, it is important that we address what led us into such a deep mess in the first place. Much of the turmoil of this recession was caused by the irresponsibility of banks and financial institutions on Wall Street.” Source: White House
Obama has vowed to the American people that we will get our money bank. Part of his plan will come in the way of a fee assessed to banks that received TARP funding. If Obama’s plan comes to fruition, this fee would stay in place until off the TARP funds have been recovered.
This fee is only targeted at the largest banks. Your neighborhood bank won’t be affected but if your financial institution of choice has more than $50 billion in assets, it would be assessed a fee. The fee will vary depending on the amount of debt that the bank holds — the more debt, the higher the fee.
Naturally, there are those that were taken aback by this announcement. President Obama addressed those with concerns:
“Those who oppose this fee say the banks can’t afford to pay back the American people without passing on the costs to their shareholders and customers. But that’s hard to believe when there are reports that Wall Street is going to hand out more money in bonuses and compensation just this year than the cost of this fee over the next ten years. If the big financial firms can afford massive bonuses, they can afford to pay back the American people.” Source: White House
Now it is up to the Obama administration and Congress to get this fee enacted. I’d love to hear your thoughts about this plan. Do you think that this is a reasonable solution to recover the TARP funds? Or do you feel that this fee is unfair and will not help the nation recover from the financial crisis?