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Quick Picks: Banks Swap Regulators and Pols Use Bailout

Quick Picks focuses on a select few of the day's stories from "Breaking on the Web."

  • These days, nobody's accusing federal banking regulators of being too strict, but many banks have been trying to evade their reach anyway by switching to state charters, reports today's Washington Post. According to the Post, at least 30 banks facing federal regulatory actions have swapped those federal regulators for state supervision by switching charters since 2000. Those banks can then claim that the federal actions don't apply to them, making this "choose-a-charter" system seem more like a get-out-of-jail-free card.
  • Back in October, we noted that the Treasury Department was being remarkably secretive about its criteria for picking banks worthy of bailout bucks. Today the Wall Street Journal offers a hint as to why: Friends in high places might be tipping the scales. According to the Journal, powerful politicians have thrown their weight around to try to steer bailout funds to banks in their home state, sometimes regardless of how healthy that bank is. As the governor of South Carolina puts it, "If you've got the right lobbyist and the right representative connected to Washington or the right ties to Washington, you get the golden tap on the shoulder."

Check out more of our roundup of the best investigative stories around the Web.

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