Small businesses are starving for credit.

From today’s Washington Post:

The origin of the CFPA proposal may help explain why it has become so controversial. The idea for a new agency with broad powers to police the marketplace for borrowing — mortgages, credit cards, payday loans and other forms of consumer credit — came from a 2007 article that Harvard Law professor Elizabeth Warren wrote for Democracy, a liberal policy journal with a circulation of 5,000.

In June, the Obama administration adopted her concept for its package of regulatory reforms. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) was an early supporter. He called consumer protection “our first priority” and urged approval of “an independent consumer protection agency whose sole focus is the financial well-being of consumers.”

But Sen. Richard C. Shelby (R-Ala.), the banking committee’s ranking Republican, said he wouldn’t support the creation of an independent agency, calling it “a folly and dangerous” and an expression of the paternalism he thinks government should avoid. Yet Shelby, who likes to call himself “something of a populist,” also said he favored new consumer protections. “Consumers are not likely to participate in our markets . . . unless they know they are protected against fraud and unfair dealings,” he said last summer.

Our critics never acknowledge the millions of people who are helped every year by payday loans.  They always trot out the one dramatic story they can find of someone who probably shouldn’t have taken a payday loan in the first place.

PDLindustrynews has some provocative new posts.

This story about the services that garner the most consumer complaints in Florida includes overdraft protection, but does NOT include payday loans.

Not sure if this will lead to anything.

This guy aggregates payday lending store locations and makes a chart…. a meaningless chart.   Let’s see this chart laid over locations of Wal-marts, or Target stores.

But not by Al Franken. He says he opposed the nomination because he didn’t get the assurances he wanted about consumer protection. As Franken told the Huffington Post:

A strong Consumer Financial Protection Agency and other consumer protections are essential to securing our economy for Main Street and the middle class. I needed to know that a robust CFPA would be a part of financial regulatory reform in order to support Chairman Bernanke’s confirmation to a second term. As governor of the Federal Reserve and then Chairman of the Federal Reserve,  Bernanke did almost nothing to protect consumers and when he did, it was too late. I needed the assurance that would improve. And I didn’t get that.

Limiting consumers’ choices doesn’t seem like a very good way to protect them.

Frankly, I’m having trouble understanding  this story but it appears that a politician is under attack for supporting reasonable regulation but not wanting to ban the industry.

That’s how US News & World Report describes the debate over payday lending.  I believe it’s more directed at our critics.    From the article:

Loan sharks. It’s a term that conjures images of dark alleys, broken kneecaps, and the heyday of organized crime. But in some corners, it’s being applied to people who register with the government, sit behind desks, and work at publicly traded companies.

Yes, the first half of that paragraph would be a theatrical level of vitriol.