July 22 (Bloomberg) -- Banks continue to feast at the bailout banquet while consumers are getting thrown the crumbs.

The most vexing result of last year’s financial meltdown is that loans are harder to get and more expensive, even if your credit is good. Yet on Wall Street, happy days look like they are here again.

To almost no one’s surprise, the nation’s largest banks are returning to their old, pre-crisis ways, even in the midst of a $23.7 trillion bailout, the biggest financial rescue in history.

Banks based on trading and highly leveraged business models still pose a huge risk to the financial system, so much so that our government has enshrined as policy the doctrine of “too big to fail.” Haven’t we learned anything from the past year?

While trading and investment-banking profits for Goldman Sachs Group Inc. and JPMorgan Chase & Co. soared in the second quarter, Washington’s attitude toward policing financial services practices is still a weak, unpracticed theory.

The second banking crisis unfolds with the realization that “reckless banking practices” translated into $65 trillion in global wealth lost since September 2007, says Nomi Prins, a former Goldman Sachs managing director, who is publishing a book on the financial debacle titled “It Takes A Pillage.” This meltdown will continue to pummel Western economies for years if not decades.

Culture Thriving

Prins, who once marketed collateralized debt obligations -- which were often used to bundle toxic mortgages -- notes that the largest banks have actually grown during this crisis: Bank of America Corp. took over Merrill Lynch & Co., JPMorgan assumed Bear Stearns Cos. and Wells Fargo & Co. acquired Wachovia Corp.

Bigger isn’t better for consumers. Prins says these institutions have “less incentive (since they have more market share) to offer higher savings rates, or broader credit terms to consumers, or open mortgage restructuring policies, or even lower fees on regular accounts -- they simply don’t have to, and it was not a condition of their bailout money to make it so.”

Nothing has changed in recent months, except that taxpayers are increasingly getting treated as if they’re homeless and begging for money. Congress has yet to find the gumption to make lower financing rates and foreclosure-halting mortgage modifications mandatory.

Banks are bringing in more money, although they aren’t making credit widely available, prolonging the recession.

Consumers Aren’t Helped

While two-thirds of all government-insured banks reported asset growth in the first quarter, total loans fell by about $160 billion, or 2.1 percent, according to the Federal Deposit Insurance Corp.

Of those banks that received bailout money from the government’s Troubled Asset Relief Program, or TARP, only 29 of 103 surveyed said they loaned out funds for “residential mortgage activities.”

A July 21 report from the TARP special inspector general also noted that 17 of 61 banks surveyed said they were doing “other consumer lending” and only nine of 34 banks were doing mortgage-loan modifications.

Banks are missing in action on the foreclosure front as well. Only a handful of mortgages for those facing default due to higher adjustable rates or job losses are being modified. A recent Federal Reserve of Boston study found that only 3 percent of “seriously delinquent loans” were being made more affordable by the banks they studied.

Meanwhile, lending across the board has tightened. Mortgages are difficult to obtain -- even for the most creditworthy -- and banks are lowering credit-card limits, which can impair one’s ability to borrow if your credit scores drop.

Little Support

Even as the cost of funds to banks has held near historic lows since the end of last year, annual credit-card finance rates rose from an average of 12.02 percent to 13.08 percent between November and February, according to the Congressional Oversight Panel.

If anything, fees on credit cards and bank accounts will continue to rise as banks try to recoup their losses and shift their risk to you through obnoxious overdraft fees, higher finance rates and lower credit limits.

Want to push back? Just maybe the best treatment for mega- banking’s avarice-addled culture is for us to stop enabling their addiction.

Your best recourse may be to limit credit card use, make insured deposits at local thrifts and regional banks -- the deposit insurance limit is generally $250,000 per account through 2013 -- and turn to alternative sources of lending such as credit unions and your own family. Avoid commission-based services through banks, insurers and brokers.

A brand-name big bank may represent the old way of doing business. And that’s been one of the surest ways to part you from your wealth.

(John F. Wasik, author of “The Cul-de-Sac Syndrome,” is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John F. Wasik in Chicago at jwasik@bloomberg.net.

Last Updated: July 21, 2009 21:00 EDT