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Report: Wall St. Considers Constitutional Challenge to Responsibility Fee

By Anonymous

Note: See earlier post for a weekly summary and a look ahead.

From Eric Dash at the NY Times: Wall St. Weighs a Constitutional Challenge to a Proposed Tax

In an e-mail message sent last week to the heads of Wall Street legal departments, executives of the lobbying group, the Securities Industry and Financial Markets Association, wrote that a bank tax might be unconstitutional because it would unfairly single out and penalize big banks ... [and]has hired a top Supreme Court litigator to study a possible legal battle ...

Privately, executives at several large banks said they believed a legal battle was doomed to fail in Washington and risked escalating public rage over the bailouts of the banks.

The fee is imposed only on banks with "more than $50 billion in consolidated assets", and on the liabilities "excluding FDIC-assessed deposits and insurance policy reserves". It is hard to imagine that would be unconstitutional.

Full post as published by Calculated Risk on January 17, 2010 (boomark / email).