Factbox: Obama administration's bank fees plan

WASHINGTON (Reuters) - The Obama administration is levying a fee against major U.S. financial institutions to recover anticipated losses up to $117 billion from bailing them out during the current financial crisis.

Following is a description of the fee plan, to be known as the Financial Crisis Responsibility fee, and reasons for it:

WHY IS WASHINGTON PUTTING NEW FEES ON BANKS?

The government poured hundreds of billions of taxpayers' dollars into banks, insurance firms and automakers, mostly in 2008, and has been repaid part of it but will never get all the money back.

The money came from the $700-billion Troubled Assets Relief Program, which Congress approved in September 2008. The fiscal 2011 budget to be issued in early February will project TARP losses of $117 billion.

The bailout and the prospect of losses has infuriated taxpayers, especially since big banks are resuming past practices of paying themselves huge bonuses while restricting credit availability for consumers.

Aside from a public feeling that bankers are acting without conscience, their behavior could create a political backlash against ruling Democrats perceived to be permitting bankers to return to "business as usual" as Republicans prepare campaigns for November congressional elections.

WHO IS GOING TO HAVE TO PAY THE FEES?

The intent is to apply the fee to the largest and most highly leveraged firms like bank and thrift holding companies, insured depositories and insurance companies, charging a fee on debts of firms with assets of $50 billion or more to try to deter them from excessive use of leverage.

The fee will apply not only to firms that got bailout money but also to others that did not, if they are big enough.

Broker-dealers with assets of $50 billion or more would also be charged the fee.

The White House estimates that over 60 percent of the fees will be paid by the 10 largest financial institutions.

Small community banks, which generally do not meet the $50-billion-dollar assets threshold, would not pay the fee.

Administration officials estimate that about 50 firms will have to pay it, around 35 U.S.-owned and the remainder of them U.S. subsidiaries of foreign-owned financial firms.

HOW MUCH IS THE FEE?

It will be set at about 15 basis points, or 0.15 percentage point, of covered liabilities. That will be determined by looking at total assets and subtracting tier one capital including common stock, disclosed reserves and retained earnings as well as Federal Deposit Insurance Corp-insured deposits at banks and policy reserves at insurance companies.

DOES THE PLAN INCLUDE SPECIAL CASES?

In the context of the bailouts, during which some firms got special help that spotlighted their distress, a few are being spared the fee despite the fact that there is anger at them.

U.S. automakers General Motors and Chrysler, which both went into bankruptcy during 2008 and got bailout money, will not have to pay because they are industrial companies and it is hard to measure their liabilities on the same basis as a bank.

Mortgage giants Fannie Mae and Freddie Mac, famed for paying their executives handsomely in the high-flying 1990s but driven into government conservatorship in 2008, will not be charged the fee because they now are essentially taxpayer-owned entities.

WILL THIS FEE LAST FOREVER, OR IS IT TEMPORARY?

The administration wants to keep it in place for 10 years, or as long as necessary to recover all TARP losses. President Barack Obama says he wants to ensure that "every single dime the American people are owed" comes back.

Over 10 years, the administration expects to raise $90 billion and officials think that will cover eventual costs of the bailout program.

(Reporting by Alister Bull and Glenn Somerville; Editing by Andrea Ricci)