The 2010 Dodd-Frank Act, intended to reform banks, hasn’t eliminated the issue of “too big to fail," says former FDIC Chairman Bill Isaac, now a senior managing director at FTI Consulting.

Banks’ inordinate size represented one of the biggest problems surrounding the recent financial crisis, experts agree.

“The Dodd-Frank Financial Reform Act purported to fix too big to fail, but it really didn’t,” Isaac tells Newsmax TV in an exclusive interview. “There are five or six banks in this country that control over half the banking assets, and they are as a practical matter just too big and too important to the economy to be allowed to fail.”

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Credit markets feel the same way, as illustrated by the fact that they are giving the big banks lower interest rates for funding than they do smaller banks, Isaac says.

“They get their funding cheaper, which gives them a competitive advantage, which lets them grow faster. So, the problem is still with us.”

But on the plus side, “Now we seem to have a consensus from all ends of the political spectrum that we finally have to address this problem,” Isaac adds. And that consensus means the issue will be addressed.

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Isaac acknowledges that banks are in much better shape now than they were before the financial crisis, having built up their capital. But they "will find a way to get into trouble again,” he says. He has had a ringside seat for the banking crises of the 1970s, the 1980s/early 1990s and now the latest crisis.

“That’s three major crises in my professional career, and I don’t doubt that we will forget the lessons,” he notes. “They haven’t even really learned all the lessons, and I don’t doubt that … five or 10 years or 15 years from now we’ll be back in the soup again in a different form.”

Isaac is upset that prosecution efforts related to the financial crisis are being directed at banks, rather than the bank officials who were responsible for the wrongdoing.

“In the 1980s, [when Isaac headed the FDIC,] we weren’t prosecuting banks. . . . The focus was not on trying to tear down the bank. We were prosecuting the people who ran the banks, who committed the acts,” he says.

But that’s not the case now, and “I don’t believe that what we’re doing this time around serves our economy well,” Isaac adds. “I believe that the banks are the wrong person to be dealing with. Banks don’t commit crimes. Banks don’t commit negligence. The people who are running and overseeing banks do those things. … I don’t care how big the bank is. We should be going after the individuals who cause the problems.”

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