October 24, 2009

Handing out small loans against future paychecks had absolutely nothing to do with last year's market meltdown, but federal regulators have been itching to get their hands on the the payday lending industry for years, and yesterday's committee vote on the creation of a new omnibus agency to control all financial products was the perfect opportunity.

The House Financial Services Committee voted 39 to 20 on Thursday to create a new Consumer Financial Protection Agency (CFPA). The stated goal of the proposed law, which will now move to a broader vote, is to consolidate regulation of financial products and use the resulting agency to monitor the use of sub-prime mortgages and other high-risk, complicated financial products.