President Barack Obama’s proposal to create a Consumer Financial Protection Agency came in with a bang. But it appears to be going out with a whimper.

Eight credit unions in North Texas said Wednesday that they plan to compete directly with payday lenders, who charge consumers 300 to 400 percent interest, by developing a loan at a fraction of that cost.

“We are in the very early stages of development, but what we do know is that the interest rate will be capped at 18 percent,” said Linda Webb-Mañon, a spokeswoman for the Dallas-based Texas Credit Union League. “That is the max. And when you consider what consumers pay at predatory lenders, it’s a good deal.”

Let’s wait to see what the actual terms (and applications fees) are.

Many short-term critics don’t use the product, so can they adequately speak for our customers? Yet, they attack the industry and hype a triple-digit annualized percentage rate (APR).

No one applies for yearlong, short-term loans. Actually, Cash America limits its customers to four renewals annually, so an APR like that is impossible to actually realize.

Speaking from experience, most customers facing financial emergencies use short-term loans wisely. A short-term loan is a viable solution when offered by reputable lenders like Cash America. We fill the void banks created after they stopped offering small-dollar, short-term loans years ago.

Our opponents believe prohibiting the product will “help customers.”

This is a fabrication. In reality, imposing rate caps of 36 percent APR eliminates a viable credit option. At that cap, the permissible charge for a $100 two-week loan is $1.08, which makes it impossible to cover the cost of paying our employees and operating our stores — adding even more numbers to the unemployed in Texas.

According to a financial-literacy survey by the Center for Economic and Entrepreneurial Literacy, which advocates personal-finance education, just a quarter of adults knew that overdrawing their checking account (bouncing a check) for a quick $100 was more expensive than a payday loan, credit-card advance or emergency wire transfer. More than half said they thought that a payday loan would be pricier.

The Payday Pundit’s blood pressure is back down, we’re breathing normally again. 

As Justice Brandeis said:

Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficial. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment of men of zeal, well-meaning but without under-standing.

- Justice Louis Brandeis Olmstead v. United States, 277 U.S. 479 (1928)