I guess it doesn’t matter that CFSA denounced the same practice last week.

Lynn DeVault, board chair of CFSA, said she knows of no payday advance companies that engage in this practice and that the industry strongly supports efforts to block all lenders from gaining access to a borrower’s bank account through these sub-account arrangements.

Politically, the White House may well be correct. President Obama and congressional Democrats can afford to play hardball: If they get a bill that reflects mainly their ideas, they win; if the Republicans kill it with a filibuster, Democrats win anyway. This only makes the Republican leadership’s apparent strategy that much more puzzling. By all means, the GOP should leverage its 41 Senate votes to obtain reasonable concessions on genuine issues. But it should not play the politics of no. And if the GOP does offer to bargain in good faith, even at this relatively late date, the administration should respond positively. Whatever the politics, contributions from both sides would produce the best — and most politically sustainable — financial regulatory reform for the country.

With a proposed overhaul of financial regulations facing stiff headwinds in the Senate, consumer advocates have redoubled their efforts to portray opponents as favoring big banks over the interests of ordinary Americans.

The latest offensive centers on the most divisive piece of the pending legislation: the proposal for a new agency to protect consumers of mortgages, credit cards and other such products from abuses by lenders. The Consumer Financial Protection Agency is a key element of the Obama administration’s blueprint for financial reform and was included in a House bill that passed in December with support only from Democrats.

Bad ideas never seem to die.

A U.S. congressional committee is likely on Wednesday {sic} to endorse the creation of a financial watchdog agency to protect consumers, with large banks likely to feel its bite worst.

The proposed Consumer Financial Protection Agency (CFPA), a linchpin of the Obama administration’s plan to tighten regulation after the worst financial crisis in decades, has been under attack from bank lobbyists and Republicans.

Over months of debate, the agency’s scope and scale have been cut back through the bill-drafting process in the U.S. House of Representatives Financial Services Committee.

“These inaccuracies are significant because the story purports to be about unregulated financial services whose customers are ‘unbanked,’” said D. Lynn DeVault, CFSA President. “Payday lenders do not fit into either category.”

In the financial world, those without access to traditional financial services have been dubbed the “unbanked.” With spotty bank records and thin or nonexistent credit reports — documents often required to rent an apartment, buy a cellphone or even get a job — they rely on storefront businesses that may charge a 4 percent fee to cash a check or a 995 percent annual interest rate for a short-term loan.

The story goes on to describe a worker who lives and works in North Carolina and Washington, DC (two jurisdictions without payday lending) as using payday loans.  Very suspicious.

For more than three hours Wednesday, supporters and opponents of a new federal agency that would oversee mortgages, credit cards and other consumer financial products dug deeper into their trenches in Room 2128 of the Rayburn House Office Building.

But government has every right to rein in an industry practice that in many cases has become predatory by design, allowing customers to overdraw their accounts.

No matter which side you think is right or wrong on this issue, I must point out a troubling trend that just won’t die: The financial industry continues to greatly profit from consumers’ love affair with plastic.

Many of the overdraft penalties come from debit card transactions. In less than 15 years, debit card transactions in the United States have grown from 1 percent of noncash transactions to more than 50 percent, according to new research from TowerGroup.

As access to credit tightened and people pulled back from using credit cards, they used their debit cards more.

Because debit cards are linked to individuals’ banking accounts, customers supposedly are forced to spend only what they have in their accounts. The financial institutions have actually convinced some people that using a debit card is the same as using cash.

It’s not.

Two of the nation’s largest retail banks said they will announce new limits on overdraft fees Wednesday as the industry seeks to contain rising anger over the practice.

Bank of America, the largest retail bank, said that beginning Oct. 19 it will let customers decline overdraft protection, and it will no longer charge fees on overdrafts if the account is in the red by less than $10. The bank also will limit the number of times customers can be charged overdraft fees to four times a day — reversing changes earlier this year that increased the limit to 10 times a day.

The Payday Pundit is surprised that transparency is not front and center.

Nothing in current law or regulations prevents banks from doing this, which is why banks’ revenue from overdraft fees is projected to climb from $18 billion a decade ago to $38.5 billion this year. No doubt our nation’s troubled financial firms need all the cash they can get these days just to remain on sound footing. No doubt many consumers who received automatic overdraft protection were indeed glad that they got it, as the American Bankers Association argues. And, yes, in an ideal world, consumers would be responsible for precisely monitoring their personal cash flows.

Need I say it.  Payday loans are the most transparent financial service there is.