There’s been a lot of speculation as to how Richard Cordray, the newly appointed director of the Consumer Financial Protection Bureau, will handle the vast array of businesses that now fall under his purview. The concern is that, being an Obama appointee, he’ll use regulatory fiat to choke off businesses that operate in subprime credit and debt collection. This would be unfortunate, because investors looking for high-growth stocks with the potential for big returns would lose out.

I say there’s little to worry about — buy these stocks because they have huge upside.

For starters, all of these companies are already sufficiently regulated by the states (at the least) and in some cases, by the federal government. Payday lenders, which provide short-term cash advances against a customer’s next paycheck, are governed by state statute. In addition, most are members of Community Financial Service Association and adhere to the trade association’s Best Practices.

States that have banned these loans have seen consumers and the economy suffer and people lose their jobs. When payday loans are taken away from the consumer, they are forced to get that credit somewhere else,\ since demand doesn’t vanish. That other choice is almost always writing a bad check, which results in bounced check and merchant fees that are vastly in excess of a payday-loan fee. Debt-collection companies are already required to follow the Fair Debt Collection Practices Act, which is a federal law, and many states have additional requirements.

In short, there is really very little intervention Cordray needs to do. In addition, a reasonable interpretation of the Dodd-Frank law places fairly specific boundaries around any overreach by the director. Responsible companies that adhere to the laws as written are on solid ground. I’ve followed, invested in, consulted for, and been exposed to all levels of subprime credit and debt-collection businesses for many years. Simply put, the public companies have nothing to fear because they do business responsibly.

Finally, for those who may still be worried, should the GOP retake the White House in the fall — and especially if Republicans retake Congress — say goodbye to the CFPB. So with all this in mind, with regard to the stocks in this arena, I see a great opportunity for big returns — returns that I’ve enjoyed for years, having traded all of these stocks at one time or another.

First Cash Financial Services (NYSE:FCFS) used to be a payday lender, but now that aspect of its business is relatively small. It now focuses primarily on pawn operations, including blockbuster growth in Mexico. The company trades at $42 and deserves a 20 P-E based on a long-term 20% growth rate and a $2.65  earnings expection for 2012 that gives it a fair value of $53 for this year alone — and double in four years.

There’s even more value in EZCORP (NASDAQ:EZPW). EZ has also focused on Mexican pawn. The company trades at $31, and based on 2012 projected earnings of $3.05 and 20% annualized growth going forward, this stock’s fair value is $60 — which means a 100% return just to reach 2012’s target.

Auto loans are a great business, particularly for companies that lend money to auto dealers and purchase dealer loan portfolios. Credit Acceptance Corporation (NASDAQ:CACC) is growing at 17% annually, yet trades at only 11x this year’s estimates. Like the payday lenders mentioned above, they have virtually no debt, plenty of cash, and are a free cash flow machine.

Subprime used-auto dealers always make a killing if they run their business properly. They are able to charge healthy interest rates and have the vehicles as collateral. America’s Car-Mart (NASDAQ:CRMT) is the play here, but I’d wait before buying. Growth is only 7% this year, with 12% expected for next year, and cash flow isn’t fantastic. The company has no debt, though, so it’s expensive at 16x earnings.

Finally, we have a great debt-collection play. Portfolio Recovery Associates (NASDAQ:PRAA) buys debt that other companies have been unable to collect, which they buy for next to nothing. They then try to collect on it themselves, and as any debt collector knows, there is an art to being successful. The company does it better than anyone. The company borrows money to purchase the debt, collects on it at a rate vastly exceeding the debt service, and then uses the $150 million in annual free cash flow to buy more. It’s a great business, growing at a 20% clip, yet it’s a screaming bargain at only 10x this year’s estimates — again suggesting a 100% return to reach full value.

As of this writing, Lawrence Meyers holds shares of First Cash and EZCorp.