Place the diced tomatoes, water, garlic, and bay leaves into a saucepan, and bring to a simmer over high heat. Reduce heat to medium-low, and season with the cayenne pepper, chili powder, garlic powder, and Italian seasoning. Cover, and simmer 15 minutes.
After 15 minutes, pour in the black beans and kidney beans; return to a simmer, and cook for 5 minutes. Stir in the peanut butter until dissolved, then remove and discard the bay leaves, and season the chili with salt and pepper to taste. Enjoy with a sprinkle of Cheddar cheese, tortilla chips and smile!