Banks Are Scared of Their Own Investors

When making an investment decision, prudent investors seek to understand exactly how a company makes its money and what risks, current and future, could derail the company's earning potential. To do that, investors of public companies need information. 

Banks apparently don't see it that way. Quietly hiding behind industry lobbying groups, banks are fighting regulations that would require increased granularity in fee income sources in their quarterly financial reports.

After witnessing banks like Wells Fargo (NYSE: WFC  ) and Bank of America (NYSE: BAC  ) pay hundreds of millions of dollars for malpractices surrounding these very fees, and as TD Bank (NYSE: TD  ) pre-emptively refunds customers before regulators force the issue, it's clear that this granularity is needed.

In the video below, Motley Fool contributor Jay Jenkins discusses how the new regulatory landscape is more pertinent than ever for investors, as the risk of millions of dollars of fines and reputation risk to the franchise warrant the increased disclosures.

With so much of the financial industry getting bad press these days, it may be a greedy when others are fearful moment. Not surprisingly, some of Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, "The Stocks Only the Smartest Investors Are Buying," you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.


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  • Report this Comment On July 28, 2013, at 2:08 PM, yaovk wrote:

    It is time to reign in the banks before they enrich themselves obscenely another round with public money by bringing havoc to our economy. The taxpayers have suffered enough financially through the savings and loans scandal and the recent mortgage crisis. I would venture to say this republican congress will do anything to water down any regulations to control the banks malfeasance, after all these scandals were brought about under republican administrations to enrich their rich sponsors. They would of course deny their "laisser faire" policies were responsible for these scandals.

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