Jamie Dimon JPMorgan Chase CEO Jamie Dimon testifies on Capitol Hill before the Senate Banking Committee in June 2012. (J. Scott Applewhite / AP)

Five years after the Wall Street crash, Washington is still fighting over how to reform the financial sector. The headline news last week was that Republicans and some Democrats in the House last Wednesday have passed measures that would gut key provisions in the Dodd-Frank Act. But perhaps more significant — and discouraging — were the latest words from the White House on financial reform. According to a Politico report, President Obama simply isn’t concerned with the issue any more: “The White House has no desire to reopen any part of Dodd-Frank and believes too-big-to-fail will soon be a closed chapter. A senior White House official told POLITICO the provisions of Dodd-Frank mean no large bank will ever be bailed out again, and new capital standards mean the system is already significantly safer.”

If this really is the White House’s position, it is a startlingly and dangerously naive stance to take. ” ‘Too big to fail’ is not solved and gone,” said Federal Reserve chairman Ben Bernanke last Wednesday. “It’s still here.” He went on to add that “ ‘too big to fail’ was a major source of the crisis, and we will not have successfully responded to the crisis if we do not address that successfully.” Bernanke isn’t alone; numerous Nobel laureates, current and former Fed officials and the former chief executives of some of Wall Street’s largest firms want the biggest banks broken up. The privileged status these banks receive distorts the financial system and the larger economy. In particular, this favored designation allows these firms to take bigger risks, exacerbating threats to the American and world economies. The past year has proved, yet again, that too-big-to-fail banks still threaten the financial sector, the broader economy and even the rule of law in America.

To demonstrate this, consider the record of JPMorgan Chase — according to Bloomberg, “regarded on Wall Street as one of the best-managed banks in the world.” Earlier this month, Sen. Carl Levin’s Permanent Subcommittee on Investigations released a report detailing the massive misconduct behind the firm’s “London Whale” fiasco. The firm lost more than $6 billion in high-risk trading, ignored and/or fiddled with risk measurements, distorted the size of the losses and the amount of risk it was taking on to regulators, and misled shareholders and the public when the losses became public.

This is far from JPMorgan Chase’s first major error of judgment. A new report titled “JPMorgan Chase: Out of Control,” from Josh Rosner, an analyst at the consultancy Graham Fisher and Co., notes that the bank has had to pay $16 billion in litigation expenses since 2009 to deal with various public and private actions against the firm. “JPMorgan’s list of regulatory violations over the past five years,” writes Rosner, “is long, diverse and crosses legal and regulatory jurisdictions.” Violations range from “egregiously violating” sanctions against Iran, Sudan and terrorists and their supporters to making fictitious trades to charging veterans hidden fees when refinancing mortgages — and that’s just a small sample. As Rosner notes, “many of these infractions are for repeated violations of specific control failures, which the Company had previously agreed to remedy.”

Remember, this is supposed to be “one of the best-managed banks in the world.” And when things go wrong, don’t think for a second JPMorgan Chase won’t try to stick you and me with the bill.

The danger of too big to fail to the legal system is similarly grave. No JPMorgan Chase executives have faced jail time for any of the firm’s repeated transgressions. No HSBC executives have faced criminal prosecutions for “laundering money from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma.” Almost no individuals at the dozen or more banks involved in the Libor scandal have been indicted. And not one — not one — senior executive at any Wall Street bank has seen jail time for his role in the financial crisis, five years later. Less than a month before the White House tried to pretend too big to fail was no longer an issue, Attorney General Eric Holder admitted at a Senate hearing that some banks are too big to prosecute effectively. How can anyone have faith in the American judicial system as long as there is one rule for big banks and another for everyone else?

The White House’s apathy is particularly bizarre when ending too big to fail is not just good policy but good politics as well. Yes, on Capitol Hill, the road wouldn’t be easy: The president would face opposition from not just Republicans but also key Democrats, like House Democrats’ lead 2014 fundraiser, Rep. Jim Himes (D-Conn.), a former Goldman Sachs executive who backed the measures passed in the House last week. Numerous representatives and senators, Democrat and Republican, have depended heavily on Wall Street contributions and would be reluctant to cross the industry.

But off Capitol Hill, the story is different. A recent poll found 50 percent of Americans supported breaking up the nation’s largest banks, and only 23 percent opposed it. Better still, unlike gun control, which has broad support in polls but remains verboten among one party’s base, ending too big to fail has support from activists and intellectuals on both sides of the aisle. And the 2012 campaign, especially the election of Elizabeth Warren in Massachusetts and the president’s reelection, confirmed that attacking Wall Street pays political dividends. Instead of sitting back, Obama would be wise to remember the lessons of 2012, listen to the pleas from intellectuals, policymakers and voters in both parties and lead the charge against too big to fail.

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