Photograph by Andrew Harrer/Bloomberg

Senator Elizabeth Warren, a Democrat from Massachusetts, left, talks to Thomas Curry, comptroller of the U.S. currency, following a Senate Banking Committee hearing in Washington, on March 7, 2013.

When are drug cartels and terrorism funny? When you know your audience, as Sen. Mark Kirk apparently did when he devoted his microphone to a comedic moment as the Senate Banking Committee grilled federal regulators today.

After hearing banking regulators explain why they couldn’t hit HSBC Holdings Plc harder in what they agreed was the most egregious recent example of money-laundering violations, the Illinois Republican turned slyly to a fellow committee member, Sen. Elizabeth Warren, to make a business proposition.

Kirk, who fills President Barack Obama’s old Senate seat, said he and Warren should start a financial firm to “just handle drugs and terrorism.”

“I think we can make a killing that way,” he said, and be free of the threat of prosecution.

The sedate hearing chamber erupted in laughter, including Warren’s. The Massachusetts Democrat praised Kirk’s “spirit of bipartisanship.”

Original post is Senator Kirk’s Sardonic Moment by Political Capital.

Photograph by Christopher Polk/Getty Images

Actor Daniel Day-Lewis and wife Rebecca Miller arrive at Hollywood & Highland Center on Feb. 24, 2013 in Hollywood.

Fresh from a mixed Oscars performance, the reanimated spirit of Abraham Lincoln can seek solace today in the 150th birthday celebration kicked off by one of his lesser-known legacies.

While fighting the Civil War and emancipating slaves, the 16th president also found time to breathe life into a federal banking system, starting with the National Currency Act on Feb. 25, 1863. That law led to the establishment of the Office of the Comptroller of the Currency.

Today the OCC, as it’s known, announced with pride the start of a yearlong celebration of its heritage.

“I am especially proud to lead the agency as it achieves this milestone in its distinguished history,” said the OCC’s current chief, Thomas Curry, issuing a huzzah to his agency’s “long heritage of public service.” Recognition will continue at agency events throughout the year.

As with most regulatory efforts, Lincoln’s was born of crisis: a little matter of finding a way to pay for the war. Today’s members of Lincoln’s Republican Party will likely spend the OCC’s sesquicentennial year looking askance at the stiffening of banking regulations provided in the 2010 Dodd-Frank Act.

No word yet on whether Daniel Day-Lewis will be available to blow out candles.

Original post is No Best Picture, but Another Washington Party for Lincoln by Political Capital.

Photograph by T.J. Kirkpatrick/Bloomberg

Sheila Bair, former chairman of the U.S. Federal Deposit Insurance Corp.

Sheila Bair, former head of the Federal Deposit Insurance Corp., recounts the time she was approached by a fellow airline passenger who joked that the FDIC must be short on cash for her to fly coach.

“No, we have plenty of money,” she told the man on the flight to Phoenix in 2009. “Your deposits are safe, and I always ride coach.” Retelling the story in her book, “Bull by the Horns,” she said that “movies showing senior government officials in first class and private planes are la-la land.”

On domestic flights, as Bair noted in the book, she and other regulators fly coach. When traveling overseas, on the other hand, some regulators do ride at the front of the plane.

According to federal travel records obtained through public records requests, Bair and former Comptroller of the Currency John Walsh stood out among 13 independent regulators for booking premium seats on overseas flights.

Bair and Walsh spent an average of more than $8,000 on a round-trip business class ticket each time they flew to Switzerland for meetings on international banking in 2011. On similar flights to Switzerland, Federal Trade Commission Chairman Jon Leibowitz paid $1,700 in coach, and Food & Drug Administration Commissioner Margaret Hamburg paid $1,781.

Bloomberg reporters in June filed requests under the Freedom of Information Act for records on taxpayer-supported travel in fiscal year 2011 for the top officers at 57 Cabinet departments and major government agencies. Only eight agencies complied within the legally required 20-day deadline. Six months after the filings, 38 out of 57 agencies had disclosed the travel records.

The regular trips to Switzerland by Bair and Walsh were required by their involvement with the Basel Committee on Banking Supervision as the organization hatched global capital rules for banks in the wake of the 2008 financial crisis.

Bair, who took 14 trips overseas between the start of 2009 and her departure in 2011 — all of them in business class — took advantage of an exemption from agency rules. Although the FDIC’s travel policy directs agency employees to fly coach for trips to Basel, board members are excluded from the rule for flights over six hours, according to Andrew Gray, an FDIC spokesman. All board member travel expenses are audited before they’re paid, Gray said.

Bair, who left the FDIC when her term expired in July 2011 and is now head of a group of former regulators, lawmakers and business people called the Systemic Risk Council, declined to comment. Walsh, now at McKinsey & Co., declined through a spokesman to comment.

The Office of the Comptroller of the Currency, an independent bureau of the Treasury Department, follows Treasury rules that require coach tickets unless the travel exceeds 14 hours — longer than the flight to Basel.

Walsh, who stepped down earlier this year after Thomas Curry was confirmed as Comptroller, cited a security exemption in choosing to travel business class, according to Bryan Hubbard, an agency spokesman.

“While not ideal, business class cabin seating arrangements typically allow for greater privacy and information security when the Comptroller finds it necessary to review sensitive but unclassified, non-public information,” Ron Bell, OCC’s assistant director for critical infrastructure protection and security, said in an internal memo dated Oct. 19, 2011. The memo backed up Walsh’s request for premium seats, saying they were “in the best interest of the government.”

Not all financial regulators selected higher-end seating on flights to Europe. On a November 2010 trip to London and Paris, and again on a March 2011 trip to London, former Securities and Exchange Commission chairman Mary Schapiro traveled coach.

“The agency generally pays for business-class travel only when the duration of travel is 14 hours or more, and Chairman Schapiro has followed that policy,” John Nester, an SEC spokesman, said in an e-mail.

Another financial regulator, National Credit Union Administration Chairman Debbie Matz, flew coach internationally, too. Agency records show she spent $1,379 roundtrip to attend a July 2011 credit-union conference in Glasgow, Scotland. John Fairbanks, an NCUA spokesman, said the agency only permits employees to fly business class when other seats aren’t available or on trips exceeding 14 hours, including layovers.

“One of our goals, as an agency, is to constantly work to keep expenses at a reasonable level,” Matz said in an e-mailed statement. “People expect us to practice what we preach.”

Original post is Regulators Avoiding ‘La-La Land’ Fly Coach, With Some Exceptions by Political Capital.

Before calling it a week today, House lawmakers approved a bill that removes references to “lunatics” from federal banking law.

The bill introduced by Senator Kent Conrad, a North Dakota Democrat and chairman of the Budget Committee, cleared the Senate in May and passed today in the House. Called the “21st Century Language Act of 2012,” it’s meant to strip outdated references to the mentally ill in a 1962 law.

The law, which grants trust powers to banks, says the regulator of national banks has the power to let institutions be trustees, executors or represent “estates of lunatics.”

According to Merriam-Webster, this synonym for madness — and its Latin root-word, luna — was tied to the belief that sanity could be affected by phases of the moon. (It’s a waning gibbous today, for those keeping score.)

When talking about Capitol Hill’s other current financial effort, some haven’t been so shy in their use of the word. In a joint CNN.com op-ed in July, Charles Konigsberg, former assistant budget director in the Clinton White House, and G. William Hoagland, a ex-Republican Senate budget aide, wrote that playing political games with the fiscal cliff is a “lunatic strategy.”

Original post is Banking Regulation, ‘Lunatic’ Games and Phases of the Moon by Political Capital.