Banks operate under a federal charter. That is why deposits can and are insured by the Government at no risk to the depositor. In exchange, they are heavily regulated. If they are too weak to continue, the feds can take them over. It happens all the time. The BoA situation is only notable because of the size of the bank.
Exactly so.
Banks that want the protection of the FDIC deposit insurance, or the Fed’s discount window have to deal with the regulations that stem from taking the first bite of the poison fruit.