Let us assume that the six or eight largest American financial institutions will not be broken into smaller parts, like some modern-day AT&T. Under this assumption, the solution to the “too big to fail” problem must then come from the “failure” side of things, because American financial institutions are still quite big.

Which makes the Trump administration’s decision to take a close look at Title II of Dodd-Frank — the so-called orderly liquidation authority — somewhat troubling. The administration has made noises that suggest it is thinking of embracing the Financial Choice Act on this point, which would repeal the liquidation authority and replace it with a bankruptcy mechanism often referred to as Chapter 14.

Last Thursday, the House Financial Services Committee approved the Choice Act on a party-line vote. It now goes to the House floor for consideration.

The current bank insolvency structure uses bankruptcy first, with orderly liquidation authority backing up the bankruptcy code in times of extreme financial stress, like what we saw back in 2008 and 2009. The Choice Act, sponsored by Representative Jeb Hensarling, Republican of Texas, would rely on bankruptcy only.