The US Government is trying to ramrod through a sweeping series of changes for the financial markets. Most isn't new and isn't needed, but what will happen will be a boost for some and a bane for others.

Front page news and a constant subject for financial broadcasters - is the collection of financial regulation changes being propped to Congress and voters.

This sort of big picture thing is getting to be the norm over the past several months: Whenever something becomes a political hot-button, politicos go crazy trying to get as much press as possible by trying to appear that they're going to do something massive about it.

In this case, it's the banks, financials and the whole market for stocks, bonds, futures and other derivatives that are being targeted - with the idea that rather than just enforcing existing rules and regulations, the government has to create a whole new set of regulations and even a whole new set of regulatory agencies.

While the process of legislative and regulatory change is in its early stage, we know that the markets will start to discount possible and probable outcomes. So we need to get a handle on exactly what might be changing and what might be the more likely fallout for you and your portfolio.

All this might actually end up giving us some opportunities along the way to get paid even more from our high yield dividend stocks that work well for everybody: from those needing retirement income to those just starting out their investing careers.

The Proposed Regulatory Changes

Right now the proposals coming out include a collection of changes. First, there would be a semi-merger - or at least a cooperative between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which would be further empowered to regulate and rule over the creation, ownerhip and trading of derived securities - including of course Credit Default Swaps (CDSs).

Second, the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) would have more power to oversee and potentially either limit risks or shut down banks and related financial firms. The Fed would look after the bigger banks while the FDIC would be more interested in smaller ones - but the line between the big and smaller is still fluid.

Third, the government would create a new national bank supervisor - let's call it the NBS - which would regulate and register all nationally-chartered banks. This new entity would replace and shut down the current Office of the Comptroller of the Currency (OCC), which now regulates national banks, as well as the Office of Thrift Supervision (OTS), which looks after Federal Savings Banks (FSBs) and other nationally-chartered thrifts or savings and loans.

Fourth, all thrifts would have to shift either to become Federal Banks or become state-chartered banks, thrifts, or community banks - which would then move under local state controls which are for now out of the purview of the federal regulators other than the FDIC and Fed.

Fifth, the government would create a new agency called the Consumer Financial Protection Agency (CFPA) that would regulate and rule over any individual financial product and/or service, ranging from mortgages to savings accounts to credit cards - and who knows what else.

Sixth, just in case the other government plans and new agencies don't have things covered, there would be a super-over-everybody agency that is being called the Financial Services Oversight Council (FSOC). This uber-agency would be run though and with the US Treasury as well as the heads of the other federal regulators.

If this looks, reads and sounds like a lot - it is...and it isn't.

Little Changes

None of the changes will really alter how banks and other entities are run in terms of what was behind the last and latest burst financial bubbles. The key is that the existing agencies and regulators already had the authority to step in and force changes to the capital structures and the embedded risks of any bank and related financial or brokerage firm.

Any institution with FDIC insurance has always been fair game for the FDIC to evaluate and take action on any and all risks that the firm had. In other words - if a bank holding company had a brokerage and/or trading division or company, the FDIC could step in and look at any of the books of the other areas - even those far and away from regular bank lending and deposit businesses - if it was deemed to put the firm at risk.

The Fed has always had similar authority, because it has had control over reserves and what makes up reserves - as well as margins, haircuts and reserves for trading areas and securities.

Meanwhile, the SEC and the CFTC have always had the ability to roll in and poke and prod any firm dealing with listed and over the counter (OTC) securities and transactions.

And as for consumer protections - the Federal Trade Commission (FTC) has been around since the 1930s to regulate consumer protection laws and other practices nationwide.

Meanwhile, the states still have their own sets of rules, along with state controlled banking and financial services and insurance regulators. If a firm stays within a given state, the Feds have little sway - unless you count the FDIC as well as the SEC and CFTC as well as the FTC that can step in.

What this means, first of all, is that these supposedly massive changes amount to window dressing. Banks and other related firms can continue to do what they've always done: shop for regulators and play off one regulator against another. So, unless we get the government actually empowering the guys down the line inside all of these agencies and departments, don't look for any big changes, because - while the players and the names might be changing - the game is staying the same.

This is why some of my favorite bank and financial investments that pay big dividends are actually doing well not just this week but over the past several months.

Financial Stocks to Buy - and Some to Avoid

The potential losers in this process will be some of the Federal Thrifts or FSBs that will have to go through a rebuilding of their corporate charters. This will cost money and bring a lot of attention to them and their capital bases.

If you happen to own any thrifts - and there are about a thousand public and private ones around the nation - you might want to cash out and wait for the dust to settle.

Meanwhile, on the national side of the banking business, little is really changing. For investors in institutions with Federal capital as well as those that have bought themselves out of Federal capital - the changes should be viewed as good news that the firms will continue to be allowed to operate as they have been.

This includes two sets of investments that I've been writing about for some time now.

First are my two recommended bank preferred stocks. One is the Regions Financial (NYSE: RF Z), with an 8.875 percent dividend that's continued to trade higher - currently around 21 and above - giving you a very nice high yield of over 10 percent.

The other is a local Saint Louis favorite of mine: FirstBanks (NYSE: FBS A) has a dividend of 8.15 percent and is trading ever higher again in the mid to upper 19 dollar range - resulting in a great high yield for retirement income of over 10 percent.

The second set of investments include my favorite bank mini-bonds. These are bonds that have been packaged to trade like stocks - or at least preferred stocks that are again really just bonds. A couple of favorites that are trading and paying you well to own them include the Goldman Sachs 5.8 percent minibond (NYSE: JZS), trading in the 17 dollar range giving you a high yield of over 8 percent.

And the other is a Bank of America 5.875 percent minibond (NYSE: IKM) trading at a nice discount of 18 or so bucks each - giving you a big high yield dividend of just shy of 8 percent.