Too failed to be big? Today, Public Citizen will send a formal petition to the Federal Reserve Board of Governors and the Financial Stability Oversight Council to break up Bank of America. The petition asks them to “recognize that the Bank of America Corporation . . . poses a ‘grave threat’ to the stability of the United States financial system and to mitigate that threat, as provided by section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

NYT reporter Louise Story reports on a new investigation in New York of big banks and their mortgage practices. This one is not being run by Attorney General Eric Schneiderman, though he reserves the right to get involved. Instead, the New York Department of Financial Services is investigating the banks on the issue of forced-place mortgage insurance, one of the biggest bank scams going.

Jon Huntsman has always been able to get some media love, and it’s interesting how he’s using it in his last-ditch attempt to salvage his Presidential campaign. He’s going after Mitt Romney for being a servant to big banks and saying the TBTF banks need to be “right sized.”

If you needed to appeal to one authority on banking regulation, you could do worse than to consult Sheila Bair, the former chairwoman of the FDIC. And now she’s advocating scrapping the Volcker rule and starting over. She comes at this by looking at the spectacle of MF Global – a brokerage house that would not be covered under the Volcker rule – and asking whether they would be permitted to trade depositor funds on their own account if they were a bank. The answer is far less clear-cut than it should be – and that’s the problem with how the Volcker rule emerged from the sausage grinder of the regulatory apparatus.

Today, the Consumer Financial Protection Bureau unveiled a prototype credit card agreement designed to ease understanding of obligations. The CFPB will test the statement with the Pentagon Federal Credit Union, one of the largest in the nation. This comes just before a Senate vote on Richard Cordray’s nomination to head the CFPB.

Rep. Barney Frank plans to retire, which means by next year, both lead co-sponsors of Dodd-Frank will be out of Congress, having secured a legacy of sorts through attaching their names to that legislation. So who might replace Frank as ranking member or Chair of the House Financial Services Committee?

Sit down for this one. Because you’re just not going to believe it. It seems that the more credit rating agencies are paid by corporations and banks to rate their debt, the more favorable ratings they hand out! This goes against everything I know about the untainted, incorruptible hand of the free market, and comes very close to shaking my faith in the credibility of the rating agencies.

The finance lobby wants to weaken the Volker rule that limits proprietary bets by regular banks. They find the weakest link in the regulatory chain and ride that link to achieve their ends. And the weakest link is usually the Office of the Comptroller of the Currency, colloquially known as the Office of Bank Advocacy.

In retrospect, the banks had a pretty sound strategy with Dodd-Frank: fight it during the legislative process, but not too hard, allowing lawmakers to think they’ve accomplished something. Then, during implementation, bend the regulatory apparatus to your will, gutting the law before having to follow it. That has been extremely successful, especially because Dodd-Frank wasn’t really a law so much as a promise to write a law later.

The latest victim of the finance lobby’s efforts on Dodd-Frank is the Volcker rule.

Basically, the banks successfully got the regulators to define “hedging” so broadly that virtually any proprietary trade could be seen as a hedge.

I see this as an opportunity to test a legitimate anti-bank populist message against a real opponent. Massachusetts may be a blue state, but Scott Brown has a 54% approval rating and will have scads of money to tout his record and distort his opponent’s. He’s already doing some of that, playing the role of faux-populist with New England Cable Network, pretending that he “worked very hard to make sure that banks didn’t act like casinos with our money.” The history is clear. He single-handedly watered down the Volcker rule to almost nothing, mainly to protect Mass Mutual and other state banks. He has been the recipient of hundreds of thousands of dollars of big bank largesse. This anti-bank claim he’s trying to make is untenable. And Warren knows it.