In many ways this goes right to the question of whether sub-prime financing should exist at all. When you are dealing with a certain tier of borrower or consumer, some of the debt collection tactics or lending terms are almost unavoidable, because if the lender doesn't behave that way, he will be out of business in no time. 12% interest rate actually implies a population that's not quite that terrible, with default rate maybe in the low teens. I'm sure you can dig up many sympathetic cases against a company that's involved in this business for as long as they have.
Also note that this came out not long after Buffet said on TV that "Elizabeth Warren would be more effective if she's less angry", a perfectly rational statement. From a policy perspective though, it's a more serious question. If you outlaw this sort of behavior, sub-prime financing go completely underground. These will show up as the same population that's abused by their landlords, or some local kin pin. Is this a more desirable outcome? To think that you can lend and service this population in the same way you do an American Express customer is too naive.
I think Buffet stepped in this investment thinking he can be part of a better industry in the aftermath of the manufactured housing wipe out in the late 90's and early part of 2000's. But the nature of the business is such that it molds the behavior of all the participants and absorbs them, rather than the other way around.
The way Elizabeth Warren's crowd want it, the only entity that can and will lend to this population becomes the government. And maybe that is the right solution for those moral purists. But I'm not sure it's the outcome that maximizes benefit to the society. But then again, efficiency was never the purpose of the purists.
http://www.bloomberg.com/news/articles/2014-04-30/freddie-mac-to-start-filling-trailer-park-void-buffett-laments