I've used the phrase "Me paenitet" a few times without knowing how it works. "Me" is the first person personal or reflexive pronoun in the accusative or ablative. "Paenitet" is second conjugation, PAI, third person singular. Literally it seems to be:
"It displeases/offends me," or "it is causing me regret." Me is a personal pronoun, accusative. Verus?