The public’s anger over bank bailouts can roughly be divided into two categories: “The banks got their bailout, where’s mine?” kind of anger and the self-evident, rage-inducing mantra: “Why are we bailing out the banks for the mistakes that they made?”

Treasury Secretary Timothy Geithner has talked himself hoarse on the subject for the past year and a half, but he hasn’t made much headway—and has made himself the symbol of public ire—because these two forms of public dissatisfaction haven’t been addressed.

So when word emerged today that the Treasury had struck a deal with Barney Frank, chairman of the House Financial Services Committee, to set up a mechanism to deal with future bailouts, my thoughts turned to these two forms of public outrage. What, if anything, does the bill do to make the public feel that future self-created financial monstrosities will be dealt with equitably?

Surprisingly, the answer seems to be “quite a bit.” The bill would create something resembling a “superfund,” to which the banks and other financial companies with more than $10 billion in assets—including unregulated hedge funds—would have to contribute in the event of a future crisis. In the words of the Financial Services Committee, it would be a “polluter-pays model in which the financial industry has to pay for its mistakes—not taxpayers.”

What we have here, if properly executed, is a major step toward addressing the second category of public anger, the “why can’t the banks clean up their own mess” type, while not aiming at the first at all. No surprise there. Bailing out foreclosed homeowners, bankrupt credit card customers, and other victims of "credit mania" is a worthy goal, but one that the Obama administration, despite all its rhetoric, simply hasn’t addressed at all.

But in dealing with outrage No. 2, it’s such a step in the right direction that it might tend to rehabilitate Geithner’s reputation somewhat, after he’s taken a drubbing for a long time for his close relationship with bankers, particularly Goldman Sachs. By the way, when I say “might,” I mean “might.” Barney Frank and Geithner have the broad, general principles fairly well laid out, but the problem lies in the details, specifically in the way that this superfund is being constructed and how the legislation gives far too much power to the Federal Reserve.

First and most obvious is that $10 billion asset limit. I can understand why a small bank loaning to farmers in Iowa would want to be—and should be—excluded. But a hedge fund that’s in the billion-dollar range can be a powerhouse in its own right, and certainly capable of causing havoc in the financial system. Long Term Capital Management had assets of “only” $5 billion when it started its insane, leverage-driven voyage to extinction 11 years ago. Community banks lobbied hard for this asset limit, but it’s really the hedge funds that benefit from this exclusion. The bill should carve out community banks but explicitly require hedge funds to participate.

By requiring that financial companies pitch in when one of them is having a hard time, the legislation is a variation on the old tradition in rural areas of neighbors helping out neighbors when someone’s barn is on fire. Gee, isn’t that heartwarming? But I’d like to see the superfund being financed now, not when the cinders are smoldering. The banks, hedgies, and so forth should start setting aside some of their ample profits for the rainy day that, we can predict, someday they will cause for the American people. Why not? Every rural homeowner has to pay taxes for the volunteer fire department. They don’t just get assessed when the barn burns down.

Then we come to the rest of the legislation. It would give the Federal Reserve increased power, allowing the Fed to direct financial companies to cease certain forms of behavior if it poses a "threat to the safety and soundness of such company or to the financial stability of the United States." It would create a financial-services oversight council, led by Geithner, which would function as a kind of super-regulator, setting policy and even mediating disputes between regulatory agencies.

I like the idea of financial companies being curbed, but I question who the curber is going to be. A fresh, new, New Deal-type agency would be the ideal overseer. Instead, the legislation would empower the same people, particularly at the Fed, who did a poor job of dealing with the recent financial crisis. Putting aside the usual complaints about the Fed’s opacity and lack of accountability, the Fed simply failed in its job to properly supervise the big banks in the first place, and the same can be said about Geithner.

Am I being too picky? Perhaps. But I keep remembering how Geithner said when he was nominated as Treasury secretary that he was going to keep trying until he “got it right,” keep working at it until a solution was found. He was talking about the financial crisis in general, but the same principle needs to be applied to this legislation. He and Barney Frank get A for effort, but they need to keep trying. And it would help a lot if they’d put some thought into crafting a bailout for the little guys too.