Read MoreThis is a ticking time bomb for banks
Similarly, Darrell Issa, a California representative who is the chairman on the committee of oversight and government reform released a staff report, which states:
"Operation Choke Point was created by the Justice Department to 'choke out' companies that the Administration considers a 'high risk' or otherwise objectionable, despite the fact that they are legal businesses …
"The Department lacks adequate legal authority for the initiative."
These two representatives are beginning to understand that there is something seriously wrong with bank regulation and litigation in the United States today. In 2010, Congress gave the regulators dramatically expanded authority to regulate banking in this country. The banking regulators have acted upon the wishes of Congress and established a series of new rulings that have recast the structure of financial services in America. Everything from originating mortgages, handling credit- and debit-card payments, the use of bank deposits, the structure of bank capital, and literally hundreds of other changes have been mandated and put in place.
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The Department of Justice has similarly acted upon the supposed will of the people to fine, punish, and otherwise castigate the industry. There has been no restraint on any of its activities because the people support its actions and the banks have refused to take any of these issues to court. The banks have refused to do this because they run the risk of being further fined or sued if they do so. Plus, they could literally lose their banking charters should the Justice Department and the regulators decide to take these charters away.