Congratulations to American Banker Editor at Large Barb Rehm for her "Facing the Tough Questions on Ending 'Too Big to Fail'" and her determination to stay on this story well after the initial news cycle.

However, I think she gave the federal financial regulatory agencies far too much credit for ultimately being able to end "too big to fail".  After all, it’s nearly six years since the financial crisis and, for over a decade before that, these agencies denied any U.S. banks were "too big to fail".

These are the same agencies that ignored warnings of impending disaster in the mortgage market from former Federal Reserve Governor Edward Gramlich, the FBI and others until complex securities based on mortgages made to people who could not afford them started to fall apart on their own.

These are the same agencies that, instead of taking down the big banks that precipitated the financial crisis, showered the banks with over a trillion dollars in federal aid – without any strings attached.  They provided other support to these banks – the details of which might still be secret were it not for Bloomberg news’ multiyear Freedom of Information Act battle with the Fed.

These are the same agencies that had at least 150 resident examiners inside JPMorgan Chase, yet couldn’t spot the London Whale’s proprietary trading of government-insured deposits in high-risk derivatives disguised as benign, risk management hedges. Were it not for Bloomberg News, this financial scandal might never have come to light.

These are the same agencies that use monetary fines representing small fractions of illicitly obtained earnings in failed efforts to curb nefarious activities at the megabanks. Without prosecutions of the banks and individuals, these fines amount to little more than a cost of doing business.

These are the same agencies that knew that the base rate for hundreds of trillions of dollars in credit and investment vehicles was being rigged in London, yet did nothing more than send a memo to British authorities. When nothing changed, these agencies allowed the big U.S. banks to continue using the compromised rate in dealing with American consumers, businesses, municipalities, pension funds, government agencies and government-supported enterprises. When the rate-rigging was finally exposed, these agencies assessed record financial penalties – against three foreign-headquartered banks.  But not a single U.S.-based bank.

Fortuitously, Congress appears to have re-engaged on this issue. After conducting its own analysis of a recent banking scandal, the Senate publicly castigated federal financial regulators for their abdication of responsibility. Members of Congress now seem less inclined to accept mere acknowledgement that "too big to fail" should be eliminated or braggadocio that regulators will use an iron fist to rein in the megabanks.

But, the proof is in the progress, which is headed in the wrong direction.  The TBTF banks became "too big to behave" about three years ago. They became "too big to prosecute" in February.  If, as Rehm says, regulators have the will and the authority to resolve "too big to fail", now is the time to act.  The prospect of several more years without resolution is terrifying.

Jim Wells is president of Wellspring Consulting International, which seeks to expand access to financial services for consumers who do not use traditional financial institutions.