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AOC & Sanders Propose Providing Basic Banking Thru Post Offices


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#1 LFC

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Posted 17 May 2019 - 04:51 PM

This piece at TAC was clearly written by an industry shill but the comments are abundantly informative about the possibility of providing basic banking services through the USPS. One of the things it could provide would be low/no cost accounts for lower income individuals so they don't get crushed by minimum account balance penalties. There are actually quite a few sharp people who comment over there who aren't right-wingnuts and have left some excellent comments on this topic. (Of course there are plenty of wingnuts at TAC too, especially the religious zealots who post on Dreher's stuff.) Here are a few goodies on this topic:

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Matt W says:
May 16, 2019 at 2:00 pm
Why does this author think the US Postal Service so uniquely incapable? In most European nations the Post Office makes a modest profit from its involvement in banking.

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Kent says:
May 16, 2019 at 2:39 pm
I get the author’s concerns here. I think the real issue is that the poor really don’t have access to free bank accounts from the private sector. They can’t keep their balances high enough.

So the postal service could be useful in providing free bank accounts, a place to direct deposit pay checks, and a place to turn deposits into cash. The postal service, being a part of government, might also have the ability to auto-deduct loan payments from employer paychecks, disability checks, etc… Japan uses its postal service for banking purposes, so they might be a good model.

My concerns would be more along the lines of scope creep. That what might start as a minimally profitable, conservative mechanism that is of great benefit to an under-served population, over time becomes some horrendous welfare program.

As for the postal service losing money, why hasn’t our President appointed a top-notch CEO type to work with Congress to fix this issue? I would also think that our Senate would be all over this. This is a fiscal responsibility issue.

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Joe O'Mahony says:
May 16, 2019 at 3:25 pm
One reason the post office “loses money” is that by law it must pre-pay pension and health care costs something the rest of the government and private business are not required to do. The Republicans saddled the PO with this obligations in order to destroy it. Another good reason not to be a member of the GOP.

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AlexArr says:
May 16, 2019 at 4:02 pm
Postal banking existed between 1910 and 1960 in the United States. The author seems to imply that postal banking is some hare-brained and untested scheme, when that is obviously not the case.

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Martin Ranger says:
May 16, 2019 at 4:11 pm
Absolutely nothing in this article is a valid argument against the post office providing basic banking services. Moreover, they seem to be working just fine all over the world.

A much better analysis can be found at:

https://www.barrons....king-1525092593

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TomG says:
May 17, 2019 at 9:16 am
Mr. Marchand comes off as an apologist for pay-day lenders and goes so far as to say, “Ocasio-Cortez and Sanders believe these loans are predatory and want to see rates capped and payday lenders destroyed.”

If pay-day lenders are not predatory, I don’t know what is. And if he thinks we won’t repeat big bank bailouts he is extremely naive. The ‘too big to fail’ model has only expanded since the last melt-down.

North Dakota has a long standing successful public banking industry. Perhaps we could look at the merits rather than be dismissive on the pretense that pay-day lenders and their so called ‘modest profits’ are doing some service for the working poor.

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