The Federal Reserve proposed a rule that would assess about 70 financial companies a total of $440 million to pay for the central bank’s expanded regulatory costs.
The Fed’s board of governors voted 7-0 for the proposal to “collect assessments, fees, or other charges equal to the expenses the Board estimates are necessary and appropriate to carry out its supervisory and regulatory responsibilities for these large financial companies,” according to a statement from the Fed today in Washington.
The Dodd-Frank Act, signed into law by President Barack Obama in July 2010, expanded the central bank’s power to oversee the largest financial institutions and gave regulators new tools aimed at preventing a repeat of the 2007-2009 financial crisis. The act also required the Fed to assess financial companies for the costs of this expanded oversight.
The assessment would apply to companies with more than $50 billion in assets, such as Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. The new rule is in the proposal stage. Comments on the proposal may be submitted until June 15. Last year would be the first assessment period, though payments will not be collected until the rule is finalized.
The proposed rule outlines how the Fed would determine which companies are assessed, how they would estimate their expenses, and how they would set the amount of each company’s assessment.
The size of the assessment for each firm will be based off its “total assessable assets,” as defined by the rule. The Fed said a company with assets of $50 billion would be required to pay about $1 million while a company with $1 trillion in assets would pay about $22 million.