Elizabeth Warren wants to turn Post Office into a bank (1 Viewer)

[tom22406]

Elizabeth Warren Has A Radical Plan To Remake The Post Office
Massachusetts Senator Elizabeth Warren wants to solve two American problems with one solution — turn the country's increasingly empty post offices into simple retail banks for low-income citizens without bank accounts.In an op-ed in the Huffington Post, Warren writes that "about 68 million Americans — more than a quarter of all households — are underserved by the banking system. Collectively, these households spent about $89 billion in 2012 on interest and fees for non-bank financial services like payday loans and check cashing, which works out to an average of $2,412 per household."

That means poor Americans spend roughly 10% of their income on basic banking services, according to a recent report from the Office of the Inspector General.

Meanwhile, we've got an entire infrastructure of post offices and postal employees who are seeing the number of letters and packages they deliver dwindle more and more by the day.

The services Warren and the OIG are suggesting aren't complex — just check cashing, small international money transfers, small loans, reloadable prepaid cards, and bill paying. The OIG insists that the USPS wouldn't become a bank. In fact, it insists that these services would merely use the USPS's ubiquitous network to complement what banks do and go where banks can't go.

Other countries have already done this, and the OIG says that if even 10% of what underserved Americans pay on interest and fees went to the USPS it would generate $8.9 billion in new revenue per year.

Hey, if it works ...

Read more: http://www.businessinsider.com/warren-wants-to-turn-post-offices-into-banks-2014-2#ixzz2sMTIgJDt

 

[DrJ]

Wouldn't it be easier for Obama to throw down some laws like he did against the credit card companies?

 

[fatguyinalittlecoat]

After thinking about this for a whole ten seconds, seems like a great idea. Probably some stuff I haven't considered though.

 

[Captain Quinoa]

Sounds ok to me.

 

[DrJ]

After thinking about this for a whole ten seconds, seems like a great idea. Probably some stuff I haven't considered though.

I'm not comfortable with the government taking on more responsibility when they can't even live up to the responsibility they have.

 

[SHIZNITTTT]

She is one smart lady!

 

[tom22406]

Seems to me that it would surely help the USPS to generate more revenue but would it actually help who it intends to help here in the lower income families?

They still will be paying fees to use this service(i assume),but hopefully not as bad as before.

Kinda on the fence with this one but I kinda like it.

 

[DrJ]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

 

[NCCommish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

 

[Slapdash]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

Maybe we can get the government to open a store selling bad shtick since you need a new one.

 

[NCCommish]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

You do know this proposal would be for using Post Offices in places where there is no bank. And this isn't like selling food. Last time I checked you didn't pay fees to get your food, You didn't pay usury rates to pay for the food.

 

[DrJ]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

Maybe we can get the government to open a store selling bad shtick since you need a new one.

Could they turn a profit on that?

 

[DrJ]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

You do know this proposal would be for using Post Offices in places where there is no bank. And this isn't like selling food. Last time I checked you didn't pay fees to get your food, You didn't pay usury rates to pay for the food.

You don't pay fees to get your food?

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

 

[tom22406]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off.

Exactly where I'm at as well

 

[SacramentoBob]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

You do know this proposal would be for using Post Offices in places where there is no bank. And this isn't like selling food. Last time I checked you didn't pay fees to get your food, You didn't pay usury rates to pay for the food.

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

 

[Sand]

It has been years since we've had a central bank. That turned out superbly - why not do it again?

 

[Rayderr]

They already lose my mail. Why would I want them to lose my money?

 

[Phil Elliott]

They keep sending me ads to do my postage at home and not come to the post office.

 

[Politician Spock]

Not sure I want people with a history of goin' postal holding my money.

 

[Sand]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

 

[BigJim®]

Elizabeth Warren Has A Radical Plan To Remake The Post Office
Massachusetts Senator Elizabeth Warren wants to solve two American problems with one solution — turn the country's increasingly empty post offices into simple retail banks for low-income citizens without bank accounts.In an op-ed in the Huffington Post, Warren writes that "about 68 million Americans — more than a quarter of all households — are underserved by the banking system. Collectively, these households spent about $89 billion in 2012 on interest and fees for non-bank financial services like payday loans and check cashing, which works out to an average of $2,412 per household."

That means poor Americans spend roughly 10% of their income on basic banking services, according to a recent report from the Office of the Inspector General.

I seem to recall many in the banking industry mentioning this as an unavoidable outcome while Warren was on her crusade against banks...

 

[Yankee23Fan]

Interesting....

 

[DrJ]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

 

[Spanky267]

Seems to me that it would surely help the USPS to generate more revenue but would it actually help who it intends to help here in the lower income families?

They still will be paying fees to use this service(i assume),but hopefully not as bad as before.

Kinda on the fence with this one but I kinda like it.

These are my concerns as well. This appears more about getting a chunk of the $89 Billion that the "poor" spend on pay-day loans and check cashing than actually helping them. Its made clear in the fact that OIG hopes that USPS could get 10% of that business or $8.9 Billion dollars. In the end the "poor" will still be paying out the same amount its just that Uncle Sam will be collecting it. Instead of the check cashers and pay day loan establishments. It seems that Sen. Warren is more concerned with the USPS making money than she is with the "poor" getting shafted.

 

[IvanKaramazov]

Last time I checked you didn't pay fees to get your food,

Of course you do. When you go to a store to get a gallon of milk, you have to pay the store for it. That price compensates the store owner for providing the service of acquiring the milk, storing it, and making it available to you.

In principle fees and interest are the same thing. You pay the bank for hanging onto your money, keeping track of it, and for making it available to you (including the service of time-shifting, in the case of loans and overdrafts).

 

[SacramentoBob]

Government getting into the payday loan business just seems weird to me.

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

meh...the post office has been put in an impossible situation by Congress with the ridiculous retirement requirements. I think the post office has done a very good job adapting to technology. I don't go to an actual post office ever. It all comes directly to my house. I think the post office is one of the better examples of technology done right in the government. It's still not enough to overcome the retirement debacle though.

 

[fatguyinalittlecoat]

Seems to me that it would surely help the USPS to generate more revenue but would it actually help who it intends to help here in the lower income families?

They still will be paying fees to use this service(i assume),but hopefully not as bad as before.

Kinda on the fence with this one but I kinda like it.

These are my concerns as well. This appears more about getting a chunk of the $89 Billion that the "poor" spend on pay-day loans and check cashing than actually helping them. Its made clear in the fact that OIG hopes that USPS could get 10% of that business or $8.9 Billion dollars. In the end the "poor" will still be paying out the same amount its just that Uncle Sam will be collecting it. Instead of the check cashers and pay day loan establishments. It seems that Sen. Warren is more concerned with the USPS making money than she is with the "poor" getting shafted.

None of that is in the Warren op-ed. Her expressed concern is that the poor are getting shafted.

 

[DrJ]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

meh...the post office has been put in an impossible situation by Congress with the ridiculous retirement requirements. I think the post office has done a very good job adapting to technology. I don't go to an actual post office ever. It all comes directly to my house. I think the post office is one of the better examples of technology done right in the government. It's still not enough to overcome the retirement debacle though.

As an Illinois resident I find it hard to believe that adequately funding retirements is an impossible situation compared to not funding them adequately.

 

[[icon]]

Government getting into the payday loan business just seems weird to me.

every Kroger grocery store around here does everything listed there except the small loan part.

 

[NCCommish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

 

[higgins]

 

[Black Box]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

Solution: have the USPLGS carry groceries.

 

[tom22406]

Seems to me that it would surely help the USPS to generate more revenue but would it actually help who it intends to help here in the lower income families?

They still will be paying fees to use this service(i assume),but hopefully not as bad as before.

Kinda on the fence with this one but I kinda like it.

These are my concerns as well. This appears more about getting a chunk of the $89 Billion that the "poor" spend on pay-day loans and check cashing than actually helping them. Its made clear in the fact that OIG hopes that USPS could get 10% of that business or $8.9 Billion dollars. In the end the "poor" will still be paying out the same amount its just that Uncle Sam will be collecting it. Instead of the check cashers and pay day loan establishments. It seems that Sen. Warren is more concerned with the USPS making money than she is with the "poor" getting shafted.

None of that is in the Warren op-ed. Her expressed concern is that the poor are getting shafted.

Just tossing some ideas around here but do you think this would do away with these lending establishments or just make them get even more outrageous in the things they will do to get these people suckered in?

Unless she is willing to do the cash advances that are being offered I don't really see these going away anytime soon.Some people have no idea how to manage money and just need to get cash quick no matter what fees they get.

 

[Juxtatarot]

To start, a postal worker makes a hell of a lot more than a bank teller.

 

[fatguyinalittlecoat]

Just tossing some ideas around here but do you think this would do away with these lending establishments or just make them get even more outrageous in the things they will do to get these people suckered in?

Unless she is willing to do the cash advances that are being offered I don't really see these going away anytime soon.Some people have no idea how to manage money and just need to get cash quick no matter what fees they get.

I think the Post Office would be able to steal a lot of business from predatory lenders, if they provided the same services for 10% the interest. Whether the private lenders would go out of business probably depends on whether they continued to provide services that the Post Office didn't. For example, cashing a check at 10:00 pm.

 

[DrJ]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Plenty of companies do pre fund their retirement benefits. It's really the only way to accurately account for those costs in the present day. Part of the problem is that the government wasn't doing this and as a result was severely under reporting their liabilities. So now when you suggest an entity as important as the post office should use sound fiscal practices, it becomes "impossible".

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

meh...the post office has been put in an impossible situation by Congress with the ridiculous retirement requirements. I think the post office has done a very good job adapting to technology. I don't go to an actual post office ever. It all comes directly to my house. I think the post office is one of the better examples of technology done right in the government. It's still not enough to overcome the retirement debacle though.

As an Illinois resident I find it hard to believe that adequately funding retirements is an impossible situation compared to not funding them adequately.

The pension fund has to be funded for 70 years. You have a bizarre definition of "adequate"

 

[Juxtatarot]

Just tossing some ideas around here but do you think this would do away with these lending establishments or just make them get even more outrageous in the things they will do to get these people suckered in?

Unless she is willing to do the cash advances that are being offered I don't really see these going away anytime soon.Some people have no idea how to manage money and just need to get cash quick no matter what fees they get.

I think the Post Office would be able to steal a lot of business from predatory lenders, if they provided the same services for 10% the interest. Whether the private lenders would go out of business probably depends on whether they continued to provide services that the Post Office didn't. For example, cashing a check at 10:00 pm.

I think you are underestimating the difficulty of making payday lending profitable (or, at least, breaking even) on only 10% the typical revenue. Maybe an extremely well run and targeted program could pull it off. And, I suppose, who's better to put this in the hands of than the USPS, right?

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Plenty of companies do pre fund their retirement benefits. It's really the only way to accurately account for those costs in the present day. Part of the problem is that the government wasn't doing this and as a result was severely under reporting their liabilities. So now when you suggest an entity as important as the post office should use sound fiscal practices, it becomes "impossible".

I'll give you $1 for every company the size of the USPS or larger that funds their retirement accounts 70 years out because that's what they choose to do.

 

[Slapdash]

She is not suggesting the Post Office be a bank, more like the Post Office being a Western Union. Seems like a pretty great idea really.

 

[Rayderr]

To start, a postal worker makes a hell of a lot more than a bank teller.

Holy crap, you're right. Average bank teller: $22k Average postal clerk $50k.

 

[Slapdash]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

Nothing says higher quality like Wal-Mart

 

[DrJ]

Here's a little more backstory on the pension thing as well, as it relates to the private world. http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/_Blogs/NetNet/__DAILY_POSTS/CRSmemo_postal_rhb.pdf

Before 1993 pretty much everyone acted like the government. Then they started making them report their liabilities and funding on their financials. A lot of companies took big hits and changed their practices. This included pre funding them along with things like scaling back or eliminating retiree benefits.

I see no viable reason why the post office should have some sort of exemption here. If the 5 billion or whatever is too much, we can scale back some retiree benefits...

 

[fatguyinalittlecoat]

I think you are underestimating the difficulty of making payday lending profitable (or, at least, breaking even) on only 10% the typical revenue.

This is certainly possible, as I have never attempted to run a payday lending business. But the Post Office does have big advantages that other payday lenders don't -- they already have the infrastructure and employees and security, etc. If OIG says it could be done for 10%, I'm inclined to believe them.

 

[Rayderr]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

Nothing says higher quality like Wal-Mart

If I buy a bottle of coke there, it's the same as a bottle of coke at Kroger or Safeway.

 

[tom22406]

Just tossing some ideas around here but do you think this would do away with these lending establishments or just make them get even more outrageous in the things they will do to get these people suckered in?

Unless she is willing to do the cash advances that are being offered I don't really see these going away anytime soon.Some people have no idea how to manage money and just need to get cash quick no matter what fees they get.

I think the Post Office would be able to steal a lot of business from predatory lenders, if they provided the same services for 10% the interest. Whether the private lenders would go out of business probably depends on whether they continued to provide services that the Post Office didn't. For example, cashing a check at 10:00 pm.

I'm just not really sure I want the USPS to be in the business of doing small loans.The other ideas I would be all for.

 

[DrJ]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

Nothing says higher quality like Wal-Mart

If the amount I spend on a product is one element of the quality of my shopping experience, as Warren seems to presume here, Walmart is doing a pretty great job at delivering quality.Another one they're great at is convenience, this angle seems to be part of Warren's argument as well.

 

[Spanky267]

Seems to me that it would surely help the USPS to generate more revenue but would it actually help who it intends to help here in the lower income families?

They still will be paying fees to use this service(i assume),but hopefully not as bad as before.

Kinda on the fence with this one but I kinda like it.

These are my concerns as well. This appears more about getting a chunk of the $89 Billion that the "poor" spend on pay-day loans and check cashing than actually helping them. Its made clear in the fact that OIG hopes that USPS could get 10% of that business or $8.9 Billion dollars. In the end the "poor" will still be paying out the same amount its just that Uncle Sam will be collecting it. Instead of the check cashers and pay day loan establishments. It seems that Sen. Warren is more concerned with the USPS making money than she is with the "poor" getting shafted.

None of that is in the Warren op-ed. Her expressed concern is that the poor are getting shafted.

Her op-ed expressly talks about helping the USPS shore up its financial footing. The OIG says that if 10% of the check cashing and pay-day loan business shifted to USPS it would be worth $8.9B. She wants to help the poor by turning the USPS into a pay-day loan and check cashing establishment. There are already a ton of those in poor communities. Will the USPS charge lower fees than the established competitors? While this might trigger a race to the bottom on fees, which could be of benefit to the poor, I dont see it really happening. The USPS isnt as ubiquitous in the inner city as they used to be. Will a poor person be willing to walk past 2 or 3 other check cashing/bill paying establishments to get to the neighborhood post office? Nearly every corner convenience store, liquor store of neighborhood grocery in the inner cities offer check cashing and bill pay services of some sort. This seems more like an attempt to prop up the USPS than it is to help the poor.