Thanks to Occupy Wall Street, in the State of the Union this week President Obama struck some of his most populist themes yet. He wants to tax millionaires, bring back manufacturing and prosecute the big banks. He touted his Wall Street reforms saying the big banks are "no longer allowed to make risky bets with customers deposits" and "the rest of us aren't bailing you out ever again."

But are we safe from the next big bank bailout? Many experts are dubious and Wednesday the consumer advocacy group Public Citizen decided to test the theory in the most direct way possible. They used the administrative law process to formally petition the nation's top bank regulators to move swiftly to break up Bank of America (BofA) asserting in their petition [3]: "The bank poses a grave threat to U.S. financial stability by any reasonable definition of that phrase."

"A Ticking Time Bomb"

BofA is not just big, its behemoth. With assets of $2.1 trillion, equal to more than 14 percent of U.S. GDP, it is bigger than many small countries. Yet, its stock is trading at $7.

What does Wall Street know that we don't?

The petition provides a compelling list of disturbing data points [3]. In 2008-2009, BofA publicly took $45 billion in TARP [4] bailout funds and secretly took another $1 trillion in emergency Federal Reserve loans. Yet, several analysts predict that BofA is woefully short of capital reserves and facing potentially billions in legal liability for its role in the crisis.

Although the bank declared net profits in recent quarters, these profits come from accounting tricks, one-time asset sales and stock swaps. BofA's share price to tangible book value is extremely low. The market suspects the bank is worth roughly half of what management claims, and the price of credit default swaps (a type of insurance) on BofA recently rose to record highs.

"The bank is a ticking time bomb," says David Arkush of Public Citizen. "If Bank of America in its current form were to fail, it would devastate the financial system. We're asking the regulators to make sure that never happens. The only way to be sure is to reform the institution into something safer, before any crisis materializes."

Public Citizen asked the new Financial Stability Oversight Council (FSOC), which is chaired by Treasury Secretary Tim Geithner [5] and made up of the nation's top bank regulators, to use the tools provided in the Dodd-Frank Wall Street reform law to act before a crisis occurs and to break BofA into smaller separate institutions. The law allows the FSOC to limit big bank mergers and acquisitions, restrict products and services or order it to divest assets or off-balance-sheet items after a vote to designate the institution a "grave threat" to financial stability.

"Too Big to Fail" is Alive and Well

Although President Obama said the goal of Dodd-Frank was to end the era of "too-big-to-fail," neither Geithner nor Fed Chair Ben Bernanke got the memo.

Geithner told the Special Inspector General for the Troubled Asset Relief Program in 2011 that future bailouts are possible: "In the future we may have to do exceptional things again if we face a shock that large. You just don't know what's systemic and what's not until you know the nature of the shock. It depends on the state of the world -- how deep the recession is. We have better tools now, thanks to Dodd-Frank. But you have to know the nature of the shock."

Bernanke may already be engaged in a back-door bailout of BofA. Recent news reports [6] indicate that BofA is trying to move $22 trillion in derivatives out of its Merrill Lynch [7] subsidiary into its FDIC-insured bank. The Fed favors the move. The Federal Depository Insurance Corporation (FDIC), which provides insurance to depositors if a bank fails, does not.

"By taking this action the Fed is allowing these derivatives to pose a direct risk to the FDIC insurance fund, keeping taxpayers on the hook for another bailout," according to Arthur Wilmarth of George Washington Law School.

Groups like Public Citizen fought hard during the Dodd-Frank debates to insert into the bill tools to allow regulators to break up big banks and prevent the next crisis. With BofA in such fragile condition, its time for a "test of the machinery," said scholar Lawrence Baxter of Duke Law School.

Expand the Stress Tests

Geithner is right when he says regulators can't predict future shocks; will it be the EU debt crisis, a multi-million dollar damage award against the bank or exposure to something out of the blue? While we may not know its origin, we know the shock is coming.

Remember in the Dodd-Frank debates, an amendment to break up the banks was rejected, efforts to restore Glass-Steagall [8] were rejected, a proposal to force banks to spin off and separately capitalize their dangerous derivatives desks was quashed. In leading the fight against the stronger measures, Geithner instead pushed the FSOC to scan the horizon for risk and keep an eye on the behemoth banks. He also pushed "stress tests," which all too many banks seem to pass with flying colors.

Now its time to stress test Geithner. If the FSOC fails to deliberate and vote on the very serious condition of BofA, the whole exercise will be proven a sham.

Click here to tell the President to Break Up Bank of America. [9]

The Center for Media and Democracy joined scholars and groups including Public Citizen, Americans for Financial Reform, Demos, National People's Action, Neighborhood Economic Development Advocacy Project, New Bottom Line, SAFER and U.S. PIRG in calling upon regulators [10] to investigate any threats posed by Bank of America or other large and complex financial institutions and to take all actions necessary to safeguard financial stability.