Two hot issues on the U.S. presidential campaign trail has been to reform Wall Street and break up big banks that dominate our entire financial and economic system. Now there’s more fuel to add to that fire after federal regulators told five major banks they needed to scrap their ‘living wills’ and come up with better resolution plans.

JPMorgan Chase & Co., Bank of America Corp. and three other big banks were unable to convince U.S. regulators that they wouldn’t send our economy into a downward spiral if they went belly up. To put it simply, it seems our biggest banks believe they are still “too big to fail,” and most don’t have a good plan to get out of trouble should they face bankruptcy.

That’s the purpose of a resolution plan, or a living will, to show how the financial institution will recover financial strength and viability under severe stress. Only, the feds thought the plans submitted by five of the big banks fell far short and told them to come back with an acceptable plan by October 1.

U.S. regulators now have the ability to put their foot down somewhat, thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  It was passed to help address the broken financial regulatory system than led to the 2008 crisis.

The worst case scenario for a bank that keeps coming back with a weak resolution plan is that regulators could get the authority to break them up. However, this is new territory for regulators. Just how far they’ll go working under the new rules remains to be seen.

The treasury department used $700 billion to bail out banks during the financial crash in September of 2008, but the total is closer to $17 trillion. Yes, that’s trillions in low interest loans from the Federal Reserve. They’ve apparently made good use of it, because banks are now bigger than ever.

Just how big are they? According to the Federal Deposit Insurance Corporation, the assets of just four giant banks, JPMorgan Chase, Citibank, Bank of America, and Wells Fargo, amount to 97-percent of our nation’s entire gross domestic product in 2012. Considering the banking system’s history of risky financial behavior, this is worrisome.

This brings us back to the presidential campaign.

Wall Street is mega rich and continues to be a major source of campaign funding, which exerts a lot of power over our democracy. Over the upcoming presidential election. Without stiff regulation Americans are still vulnerable to the same crisis that cost millions their homes and jobs.

Democratic presidential candidate Bernie Sanders has been one of the loudest proponents of financial reform, saying their enormous economic and political power endanger our economy and our political process. He introduced the “Too Big to Fail, Too Big to Exist Act,” with the goal of breaking up big banks.

Sanders is also pushing for reform that includes eliminating internal conflicts of interest with the Federal Reserve, which serves as the engine of the banking industry. He has even proposed a tax on Wall Street speculation to make public colleges and universities tuition-free.

Democratic presidential contender Hillary Clinton says Sanders plans are too simplistic and she has been a staunch supporter of the Dodd-Frank Act, vowing to uphold it against Republican attacks. She also wants to crack down excessive executive compensation and impose stronger regulations on “shadow banking,” like Lehman Brothers that played a leading role in causing the 2008 financial crisis.

Republican presidential candidates, Donald Trump, Ted Cruz, and John Kasich all agree that greed is a root cause of Wall Street’s issues, but they are reluctant to make moves that they perceive would threaten free enterprise or hurt smaller businesses and financial institutions.

While the feds struggle over enforcing new regulatory guidelines for Wall Street, the big banks continue to make record profits and wield enormous influence. We need a president who puts what’s best for Americans over a political agenda of power.


Mollye is a journalist, investigative reporter, and former news anchor. Mollye graduated from the University of West Florida in 1996 with a Bachelor’s in Communications Arts. She worked as an anchor and reporter for WEAR-TV 3 (an ABC affiliated) in Pensacola for nearly twenty years. She has also served as a television host and journalist with BLAB-TV and the Studer Community Institute.