In an interview with the Associated Press:

Q: Another area the CFPB will be reviewing is services for people who don’t have a bank account. How do you regulate services like payday loans and still ensure people have access to small loans?

A: Well you know, access to small dollar loans is critical to many families. The notion that we somehow try to eliminate that, it’s just not going to happen.

It can force people into unregulated markets, including “Jimmy the Leg Breaker,” which is not where we want people to be.

So it is important from a regulatory standpoint that people are not at the mercy of lenders who build business models around fooling people. They’re drawn in the front door thinking they’re going to pay one price and then beat about the head and ears, financially speaking, so that they’re paying much, much more.

On the other hand, there’s a real problem. And that is how to get good, small dollar lending started in areas where there’s great need.

Sometimes that’s going to be by community banks. Sometimes it’s going to be by non-bank lenders and sometimes it’s going to be innovations and new technology that’s going to open up markets for the currently underserved population.

Of course, all payday lending customers have bank accounts.

The American Banker describes how it will work: 

The database would store details about consumer complaints and inquiries made to the bureau’s implementation team—creating a repository for banking regulators and the FTC. There’s a lot of consumer angst to catalogue. For example, analysts say the FTC alone received more than 9,000 formal complaints about banks in 2009.

Once stored in the database, complaints can be mined by regulators for trends or signs that a bank has engaged in noncompliant, dangerous or otherwise suspect lending or business practices. “Regulators will have access and can do searches on subjects or on specific institutions to find information to support actions or enforcements,” says Mercedes Tunstall, counsel at Ballard Spahr.

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There is an alternative universe.   It’s in Britain.   There’s a non-profit there called The Center for Responsible Credit that is criticizing payday lending.

No.   The General Accountability Office says so.  From the story:

Federal workers’ personal financial health is reviewed by agencies in a number of different ways. This new report says if you’d had to take out one of these high interest loans, your financial profile – or even your security clearance – probably will NOT be compromised.

According to the Seattle Times:

One example is the appointment Jan. 6 of Holly Petraeus, the wife of Gen. David Petraeus, who’s overseeing the U.S.-led war in Afghanistan, to head an office at the bureau that protects soldiers from predatory lending.

The message in hiring her to head the Office of Servicemember Affairs was clear: Oppose the agency and you’re resisting efforts to rein in abusive payday lending and other ways that unscrupulous lenders prey on the nation’s men and women in uniform.

Similarly, to neutralize concerns by the business community, a high-ranking official from the Federal Reserve’s consumer-affairs division, Leonard Chanin, was brought in to head rule-writing efforts. That means it’s highly unlikely that the new agency will trample on providers of credit with little regard to their concerns.

“We’re closing in on six months before the agency must fling its doors open to the public … and so far they’re getting high marks from us in terms of preparation,” said Travis Plunkett, who heads lobbying on financial issues for the Consumer Federation of America. “From what I can tell, they’ve laid the groundwork for bringing on a lot of people over a short period of time.”

Banklawyersblog.com has some thoughts on recent hirings at the CFPB:

Interestingly, nowhere in the descriptions of the work histories of the General Counsel or any of his deputies do the words “consumer” or “financial” appear. None have any banking or financial institution experience, or consumer credit experience. The GC does have an excellent work history in the telecommunications industry and the FCC, and his deputies have a great deal of experience serving as lawyers to legislative committees of the US Congress, and as civil and criminal litigators and enforcement specialists in private practice. Ms Warren proclaimed that this “team…understands the economic pressures facing consumers across the country and is dedicated to leveling the playing field between lenders and families and bringing commonsense solutions to complex problems.” Parsing their resumes, I don’t see the words “economic,” “lenders,” or “families,” either.

Although it is too soon to tell how well these obviously bright people will function in a bureau whose primary mission is to regulate consumer financial products and services (and while their at it, to “level playing fields”), a logical preliminary prognostication might be that the choice of these people out of gate, which we assume was made “de facto” if not “de jure” by “Special Advisor” Elizabeth Warren, indicates that Ms. Warren wants to set the agenda on what consumer laws mean as far as the CFPB is concerned, and she doesn’t want dissenting voices from the bureau’s legal department who might have the actual experience and knowledge of consumer regulatory law to challenge her. She wants investigators, enforcers, and litigators to carry out the mission as she (and her fellow true believers) defines it, and to carry it out with the skill that people with such experience possess, but not to tell her to wait a minute because she might be on shaky legal ground.

Seems so.  From the story:

Massachusetts Attorney General Martha Coakley is one of four state prosecutors involved in discussions about the director’s job at the new federal Consumer Financial Protection Bureau, sources told Bloomberg news.

Harvard Professor Elizabeth Warren, who is setting up the new bureau, has spoken with Coakley and attorneys general from Illinois, Iowa and North Carolina about the position, although there were no formal interviews conducted and no job offers discussed, two people briefed on the conversations told Bloomberg.

Coakley’s office declined to comment on the discussions but said she is not interested in being the director of the federal consumer agency.

“Martha looks forward to working with the new agency as attorney general for the next four years,” spokesman Corey Welford told The Globe.

Two Congressmen want to know.  From the story:

Two U.S. House Republicans are asking financial regulators to project how much it will cost to implement the new Dodd-Frank financial overhaul law, taking aim at what they see as an unnecessary expansion of government.

Rep. Spencer Bachus (R., Ala.), chairman of the House Financial Services Committee, and Rep. Randy Neugebauer (R., Texas) sent a letter Friday to Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner and other regulators asking them to provide an estimate of law’s related costs for the next two fiscal years.

The lawmakers, who along with most Republicans opposed the Dodd-Frank law last summer, also asked the regulators to estimate how many new federal jobs are being created as a result of the law.

“It is our responsibility to ensure that mandates are not overly burdensome or wasteful of taxpayer money,” they wrote, requesting a response by Feb. 10.

That would be Rep. Randy Neugebauer.  From the Wall Street Journal:

U.S. Rep. Randy Neugebauer, a staunch critic of the Consumer Financial Protection Bureau, is “pleasantly surprised” by the way White House adviser Elizabeth Warren is setting up the highly controversial agency charged with policing financial markets.

Still, he has harsh words for President Barack Obama, who has yet to nominate someone to serve as the consumer bureau’s permanent director.

“The president needs to get off high center here and give that agency someone who’s in charge,” the Texas Republican said in an interview. “Some pretty important decisions are being made, and we need to make sure that we’re dealing with the person that’s going to be there [in the] long term.”