Possibly, but I don't think that this is a case where regulation is what screwed everything up. I think public perception plays just as big a role. Deregulation would improve competition but will also introduce other problems.
Incidentally I don't think it's a bad idea for government or nongovernmental to be allowed to offer these services in a deregulated market.
>Deregulation would improve competition but will also introduce other problems
Such as? Deceiving consumers and engaging in usurious interest rates?
And I completely agree that NGOs and/or government agencies should be able to offer these services -- as long as the government agencies don't get any special privileges, like being able to automatically garnish tax returns of loan recipients who default, for example. That would just be taking advantage of their government powers to eliminate the competition.
Incidentally I don't think it's a bad idea for government or nongovernmental to be allowed to offer these services in a deregulated market.