Nancy Skinner joins Judge Napolitano on Fox’s Freedom Watch in New York on June 9, 2011. The panels discusses whether Elizabeth Warren should be named CFPB head in a recess appointment because the GOP have said they will block any appointment to head this new board.

Yesterday, the Better Business Bureau of Utah warned consumers all over the country about the Utah-based company, EZ Loan Protection. The BBB says that the warning was issued because of a high number of complaints about people being charged by the company even though they never used the product.

According to the Hill, the appropriations bill we discussed earlier today has passed.

The bill now moves to full committee for a markup on June 23 and the House floor the week of July 11. Keeping with subcommittee tradition, amendments were not offered and the bill was reported out without a roll call vote.

As mobile payment technology continues to surface as a popular method for consumers, the million dollar question that could keep it in its infancy stage is whether or not it’s safe for consumers. Consumers Union came out with a recent report discussing the gap between mobile payment systems and the popular topic of consumer protection.

“As more Americans start using mobile phones to make purchases, we need to make sure that consumer protections keep pace with all the new technological advances,” Michelle Jun, senior attorney for Consumers Union’s Defend Your Dollars campaign said in a statement.  “Consumers shouldn’t have to worry that a lost or stolen mobile phone or billing error could turn into a costly financial headache.”

And nobody really has the answer to the question, not even the industry’s trade association.

A spokesman for ATT Wireless said the company would not comment on the report and suggested the answer ought to come from the industry’s trade association, the CTIA. The CTIA responded by saying an answer ought to come from the carriers. Sprint said it had nothing to say about it right now. Of the largest carriers, only Verizon Wireless had something to say. Verizon would not address the report specifically, but a spokesman did discuss the issue.

From the man considered by many to be President Obama’s eventual choice to run the CFPB:

“We are going to succeed in our mission,” Raj Date said at the Consumer Bankers Association conference. “It is not my plan to fail. Don’t listen to what people say — watch what we do.”

The CFPB is getting it from all angles and is even facing a congressional appropriations bill that could gut its funding. The House Appropriations Committee yesterday released its fiscal 2012 appropriations bill for financial services, and it includes several efforts to curb the CFPB, according to the Hill. The measure is scheduled to be marked up by the relevant subcommittee today.

All told, the $19.9 billion in funding included in the bill is nearly $2 billion below last year’s level and $6 billion below the president’s budget request, the committee said.

“This bill exemplifies the commitment of the Republican majority to reduce spending, dig our nation out of record deficits, and rein in unnecessary agency regulation and interference that obstructs economic growth. The funding in this bill is below the pre-stimulus, pre-bailout levels of 2008, and important provisions are included to prevent government overreach in a variety of areas,” said committee Chairman Hal Rogers (R-Ky.).

Notably, the bill would bring the CFPB’s budget under the purview of appropriators starting in 2013. Currently, its funding falls outside the reach of lawmakers, as it receives transfers from the Federal Reserve to fund its operations.

The measure would also cap mandatory funds for the CFPB at $200 million — the current limit is $600 million.

Branded prepaid cards are the new kid on the financial services product block. Even the government has signed up to move all government benefits to prepaid cards by March 2013, eliminating all paper checks. But one question remains, what risk is left to the consumer? One Time article lays it out on the line:

… the FDIC insurance that protects your money in the event of a bank failure isn’t guaranteed with prepaid debit cards. If the institution that issued your prepaid debit card declares bankruptcy, whether or not you have a prayer of ever seeing that money again depends on how the company organized its customers’ funds. If the money is pooled into an aggregate account, a common occurrence, consumers could lose the right to reimbursement. A 2010 Consumers Union report warns, “Some of the fine print by card issuers tells consumers that the money is not insured,” but it’s not always easy for cardholders to make this determination.

So what happens when you regulate an industry out of business? Specifically payday lending? Not only do you eliminate access to credit, but the economy also takes a hit.

A Colorado law that was passed last year extended the terms of the loans from a few weeks to six months and capped interest rates at 45 percent annually, basically eliminating the industry from serving customers who need access to short-term credit.

Jamie Fulmer, vice president at Advance America, said the law did more than reform the industry. “The law eliminated payday lending. It created a new system of six month installment loans. It is an entirely new product.” He continued, “Our company has closed half of our centers in the state and over 400 jobs have been lost in Colorado as a result of the law.”

Here’s a snapshot of how this industry previously served the Colorado economy (survey was done by IHS Global Insight in 2007).

The industry contributed over $294 million to Colorado gross state product (GSP) in 2007.

The payday lending industry supports over 4,200 jobs1 in Colorado, including 2,093 people directly employed in 641 storefront locations.

• The industry indirectly created another 783 jobs in supplier industries.
• Payday loan store and supplier industry employees induced the creation of 1,354 jobs through the purchase of goods and services using earned wages.

In Colorado, the total labor income impact from the payday loan industry is $184.5 million:

• Through direct employment, payday loan stores contributed $80 million in labor income.
• Suppliers to the payday lending industry contributed $41.6 million in labor income as an indirect result of the revenues generated by the payday loan industry.
• $62.9 million was generated from the wages of payday loan store employees and supplier industries’ employees as they were spent in Colorado’s economy.

Raj Date, one of the CFPB director candidates being floated around, said at a conference earlier this week that the agency’s policymaking process would be fact-driven.

“We have a lot of tools,” he said. When the bureau does write rules, it will be through a very deliberative, fact-based process, Mr. Date said.

He added that he sees a lot of room for new research on consumer finance and that new data will help drive policy decisions. Last month, the bureau hired Harvard University economist Sendhil Mullainathan, a leading behavioral economist, to serve as the agency’s assistant director for research.

While a director might not be confirmed any time soon, the CFPB is determined to hit the ground running when they officially become a federal agency on July 21. In a speech before the American Bankers Association, CFPB assistant director for large bank supervision Steve Antonakes said “we are all engines ready to go”. Antonakes focused mostly on the bureau’s regulation of large banks, but also spoke a bit about the way in which the CFPB will regulate nan-bank lenders as well:

Antonakes said he and Peggy Twohig, the consumer bureau’s assistant director for non-bank supervision, have agreed to create a single pool of examiners to supervise deposit-taking banks and non-bank financial firms such as check cashers.