Dungeons & Dragons is a game of make-believe, in which you get to imagine yourself playing any character you want: wizard or warrior, elf or troll. Today, companies are engaged in a similar role-playing game. But this is no childhood game of fantasy: The stakes are far larger and more real, and investors may sustain critical blows to their hit points that no saving throw can repair.

Hitting up Hogwarts
American Express (NYSE:AXP) is the latest financial services firm to want to put on Harry Potter's sorting hat and reimagine itself as a bank holding company. While the change marks the end of an era in financial services -- AmEx was the last large independent credit card company -- we're really just in the first scene of what's bound to be longer than a three-act play.

Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) were the first magicians to use the federal government's new, relaxed rules giving financials easier access to credit, which itself heralded the death of Wall Street. Yet in what is quickly becoming the mother of all mother of all bailouts, the line of would-be thespians isn't shrinking, either.

To be or not to be...
Auto and home-financing giant GMAC is mulling whether to become a bank, as is General Electric's (NYSE:GE) financing arm. Amid the crush of companies donning the mantle of bank holding company, investors would do well to ask themselves an important question: What is the benefit of suddenly converting to this new form of business? Of course, they're going to get access to the Fed's discount window and other taxpayer funds -- American Express alone seeks $3.5 billion of your money. But until recently, all of these companies had rejected the choice of becoming a bank holding company because of the greater scrutiny it invited, and because Uncle Sam would become a silent partner in their business.

Calling a mulligan
So if the only benefit is to get them through this time of crisis, what then? Do they get to yell, "Do over!" and convert back into their previous forms of business? If not, are investors willing to suffer the typically lower valuations that accompany being a bank? The so-called cheap funding that's supposedly available by chasing after depositors becomes ever more strained when more rivals enter the space.

As more businesses make the decision to become bank holding companies, thus placing more claims on the $700 billion bailout kitty, the pressure on the fund increases exponentially. Like a Ponzi scheme, the whole enterprise may collapse under its own weight, with only the early entrants getting paid. Already, Congress is trying to divert some of those monies to bail out General Motors (NYSE:GM), Ford (NYSE:F), and Chrysler, and American International Group (NYSE:AIG), called a do-over, doubling its rescue bill to taxpayers. The risks of failure grow in lockstep. Certainly, the potential for our bill to explode keeps mounting.

Break a leg
Right now, it's convenient to change to a bank holding company, and there's barely any stigma left in having to go to the government for a taxpayer handout. Indeed, with AmEx considered one of the more financially secure firms in the market, its maneuver may have more to do with not ceding the field to competitors who've already lined up hat-in-hand, and less to do with actually needing the cash.

There are many possible outcomes to this unfolding drama, and none seem happy. Worse, there's no Dungeon Master to turn to for guidance on how to extricate ourselves from this labyrinth, since all the players seem to be bad actors.

Fools have been trying to rewrite the script for a while: