In a speech today in front of the Senate Finance Committee, Treasury Department secretary Timothy Geithner renewed the push for the Financial Crisis Responsibility Fee, a tax on the liabilities of banks, proposed by the administration in January. The announcement comes at a time when bank wealth managers are becoming increasingly pressured by regulatory reform, according to a poll conducted by SEI, a third-party portfolio servicer. “Bank wealth managers should be focused on growing their business and creating lasting client relationships, but the increasing compliance burden has begun to consume more of their time and attention,” said Jim Morris from the SEI Private Bank segment. “For far too many, a new model of risk management is needed.” According to the survey of 27 bank wealth mangers located across the US, nearly all expect regulatory scrutiny to grow and only 33% are confident they can keep pace with the change. The survey found that 67% of the respondents report spending significantly more time working on compliance, compared with two years ago. Regulators and legislators alike are looking to implement a wide variety of changes to the day-to-day operations of bankers. Oftentimes banks are blamed for sharing a huge role in the current recession, but the American Bankers Association (ABA) believes that a bank tax is uncalled for. “Had the Troubled Asset Relief Program (TARP) been limited to the banking industry, there would be no losses on the program,” said ABA chief economist James Chessen, in his testimony today in front of the Senate Finance Committee. “The bank tax is an arbitrary tax on institutions of a certain size without regard to where the losses actually occurred or the payments made by banks which have provided a significant return to taxpayers.” Geithner anticipates that the tax would raise about $90bn over 10 years, and may stay in place longer, if necessary, to ensure that the cost of TARP is fully recouped. The levy goes for domestic financial firms with over $50bn in assets and international firms with US offices making at least that annually. As it stands, if adopted, qualifying firms would pay a fixed percentage of their assets adjusted for risk, minus their capital, insured deposits, and certain insurance policy reserves. Firms that take on more risk and fund those activities with less stable sources of financing would pay more than firms that are managed more conservatively. “This framework has the significant benefit of including derivatives and off-balance sheet items not otherwise reflected under conventional accounting” Geithner said. “In this way, the fee targets, and thereby would help discourage, activities that pose the most risk to the stability of the financial system.” “We believe this fee is an important complement to the financial reforms now on the Senate floor,” he added. However, Chessen maintains that the impact on credit from the current proposal can mean as much as $1trn of loans not made over the next decade and that investors react quickly to such possibilities, spurring them to move money to other industries. The current environment appears to be pushing firms like SEI to remind the industry that it can help reduce costs. Wolters Kluwer Financial Services also today launched a new website, BankingHero.com in order to allow banks and credit unions to avoid operational inefficiencies that cost the firms. “For nearly a decade, banks and credit unions have trusted our ComplianceHeadquarters.com website as an up-to-date source of regulatory information,” said Lisa Fraga, vice president and general manager of banking for Wolters Kluwer in a statement. “Now they have a place to go for the most practical, pertinent information they need to manage operational risk and work flow.” Write to Jacob Gaffney.