A Banker's Guide to the Budget

THE BANK TAX: IT'S BAA-AACK

For the third year in a row, the White House proposed a bank tax on the largest institutions. Even though it has no chance in Congress, the Obama administration more than doubled how much it wants to collect, to $61 billion. The Treasury Department proposes charging 17 basis points on covered liabilities at institutions with assets of $50 billion or more, with a 50 percent discount applied to the most stable sources of funding.

THE BIG WINNER

Under the budget proposal, funding for the U.S. Commodities Futures Trading Commission would increase by 50 percent to $308 million. More importantly, the White House is seeking to persuade Congress to let the agency charge user fees to fund it directly, similar to how banking regulators work.

NO APPROVAL NECESSARY

The proposal pegs the Consumer Financial Protection Bureau's annual budget at $448 million, a 32 percent jump from its $340 million budget this fiscal year. Unlike other budget proposals, this one does not need to be approved by Congress as the CFPB is funded directly by the Federal Reserve Board.

A SECOND OPINION

The Office of Management and Budget predicted that the Deposit Insurance Fund would be insolvent shortly and that the reserve ratio would stay negative until 2015. This clashes with the FDIC forecast, which projects milder failure-related losses and sees the reserve ratio hitting 1.15 percent in 2018. James Chessen, the American Bankers Association's chief economist, says the FDIC's estimates are more reliable.

LIVING ON THE EDGE

The budget projected that a key Federal Housing Agency account, which holds reserves against expected losses, will be depleted by the end of the year. But U.S. Deaprtment of Housing and Urban Development Secretary Shaun Donovan said that was before the struggling agency received roughly $1 billion from the recent mortgage settlement.

DOING MORE WITH LESS

The Obama budget would request only $102.4 million for the Financial Crimes Enforcement Network, a 7.5 percent drop from its budget last year.

FEE REVENUE: IT'S NOT JUST A BANK PROBLEM

The Office of the Comptroller of the Currency is projected to collect $1.03 billion in exam fees from national banks in the 2013 fiscal year, down from $1.2 billion in 2012. Still, it would be substantially more than the $722 million collected in 2011.

FUEL FOR THE ENGINE

Playing right into the view that small business is a key driver of economic growth, the budget calls for a 3 percent increase in the Small Business Administration's budget, to $949 million. Back in January, Obama elevated the SBA to a cabinet-level agency and proposed that the SBA be combined with five other government agencies focused on business or trade.

IT WON'T BE ENOUGH TO KEEP UP WITH WALL STREET BUT ...

The White House is asking for an 18 percent increase in the Securities and Exchange Commission's budget, to $1.5 billion.