Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC) Pop on Fred/Fan Proposal

Major U.S. banks like Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) were all jumping today on the White House proposal to wind down mortgage giants Freddie Mac and Fannie Mae.

Whatever happens politically, it's almost a surety that the role of government in the two entities will decline, and that could open up opportunity for the giant banks to step in.

There are a lot of opposing forces here though, as the idea of shrinking government involvement would be considered positive by most, but then the idea of banks getting bigger, which would be the outcome, doesn't sit well with many.

Of course if the free market were allowed to rule it wouldn't matter, as there wouldn't be any bailouts of banks, the taxpayers wouldn't be saddled with untold billions in debt, and well-run companies would take over the salvageable parts of the banks that sank.

Either way, this will be very interesting as to how it all plays out, and more than likely the big banks will get a larger piece of the mortgage market if they want it, and if they are efficient, could garner some major revenue and earnings from it.

That will take time though, but for today, the market likes the possibilities coming from the idea.

Wells Fargo was trading at $33.58, gaining $0.58, or 1.76 percent, as of 2:04 PM EST. JPMorgan was trading at $46.79, up $1.26, or 2.77 percent. Bank of America was at $14.82, rising $0.34, or 2.31 percent. Citigroup was trading at $4.86, up $0.08, or 1.78 percent.