The Washington Post does a nice job of highlighting just how worried payday lenders and check cashers are about the financial reform bill being debated in Congress.

This aspect of the legislation hasn’t received much attention, but it’s something that really matters to a lot of ordinary folk. (And it’s too bad the piece was apparently bumped from my print edition of the paper, to make room for coverage of Elena Kagan.)

As the Post puts it plainly:

The bill is particularly significant for payday lenders and check cashers because it could bring the bulk of their operations under the eye of a federal watchdog for the first time. According to a study by the Federal Deposit Insurance Corp. released in December, about a quarter of American households have little or no access to banks or other traditional financial services; many rely instead on payday lenders and check cashers.

The esteemed Mr Chittum noted last week that the details of the financial reform bill aren’t getting all the attention they deserve from the business press.

But this is one area where that just shouldn’t be the case. Could we really end up with a watchdog on consumer financial products that doesn’t include these guys?

The Post piece goes into good detail about how the industry is trying hard to protect itself, with a “Hill Blitz” organized by a trade group, the Financial Service Centers of America, that dispatched about 40 executives to lobby Congress.

[I]n back-to-back meetings with dozens of members of Congress last week, industry executives argued that their sector is already regulated by a complex web of legislation in the states, including some that ban payday lending. A federal regulator would create another layer of work that would increase their costs and potentially put some providers out of business, they said. In addition, they are often the only alternative for consumers who cannot qualify for — and sometimes do not want — a bank account or credit card.

“You have to make the effort to do it,” Aggie Clark, president of Seattle-based Moneytree, said of her packed day of meetings with lawmakers. Otherwise, she said, “you can get some pretty bad sound bites.”

I have no clue what Aggie Clark is trying to say there. But that states-do-the-regulating argument really isn’t persuasive. My former colleague Mary Kane at The Washington Independent has done some great reporting on this, and found that, despite new state laws across the country over the past few years, “[m]ost major payday lenders still are in business, using loopholes in existing small loan laws or circumventing new laws entirely to continue charging triple-digit annual interest rates, in some cases as high as nearly 700 percent, advocates contend.”

The industry’s current campaign isn’t limited to sending executives to the Hill. The FT reports that payday lenders have hired Wright Andrews, “a Washington lobbyist, who, along with his wife, played a big role in blunting the efforts of legislators to crack down on subprime mortgage lenders.” And they’ve launched a new ad campaign:

“Short-term lenders are already state regulated and didn’t take a dime of Federal bail-out money. So, why is Congress treating local lenders like Wall Street crooks?” says the announcer in a new television commercial that is part of a media barrage funded by the Community Financial Services Association, an industry trade group.

But wait, there’s more. David Lazarus at the Los Angeles Times reports on one particularly disturbing aspect of the effort: customers of these companies have been flooding Congress with calls asking lawmakers to leave the industry alone.

“My offices were getting hundreds of calls from the same few phone numbers, and the callers all seemed to be reading from the same script,” Boxer told me. “What was most surprising was that the callers were opposing a bill that was designed specifically to protect them.”

Turns out that “ostensibly spontaneous consumer rage” was all orchestrated by the industry. Lazarus puts it well:

It was also an extraordinary application of pressure on a vulnerable segment of the community: people with high-interest loans who could be financially devastated if the issuers of those loans suddenly demanded their money back.

As Felix Salmon says,

It’s completely insane that a system which protects the relatively well-off customers of banks might include a carve-out specifically excluding the unbanked from any federal consumer protection. They are, after all, the people who need such protection most.

Yup. It seems nuts. But this is an industry that’s had its way before. Again, the Post is good on the context, noting that “multiple efforts to target the industry through federal legislation have fallen flat,” including a House bill that didn’t make it out of committee last year.

Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at holly.yeager@gmail.com.