One of the rules in investing is to be cynical. Every company and government has a public relations facility and they all use them. Often times they will be at competing sides, and each side has a different narrative. When a government talks about waste, they often mean, those that do not agree with us. In a democracy, there are supposed to be competing sides and generally something in the middle is taken because there both sides can be correct, but both sides can exist for the benefit of government regulations.

In an article by Douglas Gillison of Reuters, the Trump administration has stopped the work of the Consumer Financial Protection Bureau (CFPB). If you go in person to a bank, you will see the signs on the door. The CFPB is funded through member banks, trust, credit unions, etc. The idea is if someone believes the bank is doing them harm, they can go to an agency which can investigate to see if harm is done. Many times, if harm is being done to one, then it is being done to many. The CFPB also battles those around the banks including financial institutions which are predators, scammers and crooks. We all know, when the solid, dependable financial institutions start acting like predators, it is relatively easy to juice up a quarter or improve bonuses. This is when the CFPB sets in and it has won judgements of nearly $20 billion in financial relief for US consumers. (seemingly also everyone has been sued and paid fines). Some of the smallest independent financial banks have been rarely fined.

It is the exception for financial services companies not to be have been fined, they have a tendency to wish the CFPB to go away. If it does consumers will lose, because many companies pay fines, say they will change and then see in their database – we have X amount of customers, if we could receive 2% more in fees we will easily meet financial expectations and they add a fee to get the 2%.

Linking to dividend paying stocks, the theory is because they have been in business for a long period on time and can pay dividends, they need to cheat the system less. If you look through the lawsuits which have been filed, invariably most companies have lawsuits filed against them. Ideally the dividend paying companies learn from the lesson and move forward in their service to customers. When you read the press releases, be aware there are 2 sides with different views.

There are more questions than answers, till the next time – to raising questions.