Administration Considers Charging Banks a Fee for Their Transactions

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Photo: iStockphoto

This morning, Politico reported that when President Obama releases his budget plans in February, he is "likely" to propose a fee on financial institutions' transactions in order to help reduce the federal deficit, and White House spokesman Robert Gibbs didn't deny it. Hmmm. On the surface, fining the banks whose mismanagement required them to accept billions of dollars in taxpayer loans — not to mention who have systematically siphoned $1.50 from our own checking account every other day since college* — sounds great. How does your own medicine taste, Bank of America? YEAH. Oh, except: "The consumer will be the ones who end up paying," Mike Moeb of Moebs Services, an independent research firm that studies financial institutions' pricing and services, tells Daily Intel. "It isn't going to be like, 'We'll charge the banks and the CEOs will pay themselves less.' We'll charge the banks, and they'll increase their prices. Interest rates on loans will go up, rates on deposits, rates on credit cards. The middle-class and low-income people will be the ones who end up paying for it. It's effectively a hidden tax. If something like this goes through, Republicans are going to have a field day."

Obama Administration Considers Fee on Banks to Recoup Bailout Funds [WSJ]
Exclusive: Obama budget likely to include (as yet undetermined) fee on banks to help taxpayers recoup cost of bailout [Politico]

*Disclaimer: Your Daily Intel editor is, like most Americans, not entirely financially responsible.