One of the Federal Reserve's main functions is to supervise and regulate big banks and other large financial companies. Now it's sending 70 of them a $440 million bill for its services.
The central bank announced Friday that it has issued a final rule establishing annual assessment fees for its supervision and regulation of large financial companies as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The fees are supposed to equal the expenses the Fed estimates are necessary or appropriate to supervise and regulate banks and savings-and-loan holding companies that have at least $50 billion in total consolidated assets and certain nonbank financial companies that the Financial Stability Oversight Council, a separate government function, has designated to be supervised by the Fed.
The Dodd-Frank Act, which became law in July 2010, expanded the Fed's oversight of large financial institutions and required the Fed to charge these companies for the costs of this additional oversight.
The final rule outlines how the Fed determines which companies are charged, estimates the applicable expenses, determines each company's fee, and bills for and collects the fees, according to the announcement.
Each calendar year is deemed an "assessment period." For 2012, the first year for which these fees will be collected, the Fed will notify each company how much it owes when the rule becomes effective in late October. Payments will be due by Dec. 15. The $440 million total due from 70 companies works out to about $6.3 million per company, though bigger companies will pay more than not-as-big banks.
In the future, the Fed plans to notify each company of its assessment fee for each year no later than June 30 of the following year and collect payments by Sept 15. The collected fees will be transferred to the U.S. Treasury, the Fed said.
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