The Wall Street Journal is reporting the FDIC “snubbed nonbanks interested in buying SVB [Silicon Valley Bank], resulting in increased costs to the insurance fund,” a revelation that doesn’t seem to be getting the attention it deserves.

Beyond the obvious implications for the potential cost to the FDIC insurance fund, this issue demonstrates at least one major problem with the U.S. bank regulatory framework: regulators have too much discretion. There is no good reason that anyone at the FDIC should be able to decide winners and losers by making it more difficult for nonbanks to purchase failed banks. All Americans are paying for this mess, as well as FDIC insurance, and they’re not banks.