Sen. Elizabeth Warren Proposes Replacing Payday Lenders With the Post Office

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This post first appeared at ThinkProgress.

Elizabeth Warren
Senator Elizabeth Warren (AP Photo/Jacquelyn Martin)

The Postal Service (USPS) could spare the most economically vulnerable Americans from dealing with predatory financial companies under a proposal endorsed over the weekend by Sen. Elizabeth Warren (D-MA).

“USPS could partner with banks to make a critical difference for millions of Americans who don’t have basic banking services because there are almost no banks or bank branches in their neighborhoods,” Warren wrote in a Huffington Post op-ed on Saturday. The op-ed picked up on a report from the USPS’s Inspector General that proposed using the agency’s extensive physical infrastructure to extend basics like debit cards and small-dollar loans to the same communities that the banking industry has generally ignored. The report found that 68 million Americans don’t have bank accounts and spent $89 billion in 2012 on interest and fees for the kinds of basic financial services that USPS could begin offering. The average un-banked household spent more than $2,400, or about 10 percent of its income, just to access its own money through things like check cashing and payday lending stores. USPS would generate savings for those families and revenue for itself by stepping in to replace those non-bank financial services companies.

Those companies are among the most predatory actors in the money business. Payday loans with annual interest rates well north of 100 percent suck paying $520 to borrow $375. After decades of operating in a regulatory blind spot and ducking state-level reforms, the payday lending business now faces a crackdown from the Consumer Financial Protection Bureau. The threat of new rules for short-term cash loans in general has caused traditional banks to stop offering deposit-advance loans with similar features.

But while ending triple-digit interest rates and fine-print tricks is a good thing for consumers, it doesn’t reduce the demand for those financial services. The USPS could slide into that space and meet that need without preying upon those communities. “Instead of partnering with predatory lenders,” David Dayen writes in The New Republic, “banks could partner with the USPS on a public option, not beholden to shareholder demands, which would treat customers more fairly.” America’s post offices are an ideal physical infrastructure for furnishing these services to communities currently neglected by banks. Roughly six in 10 post offices nationwide are in what the USPS report calls “bank deserts” — zip codes with either one or zero bank branches.

Doing business in those communities in a more ethical fashion would still be profitable enough to inject about $9 billion into the struggling federal mail agency’s books. The USPS is dealing with a fiscal crisis, one largely manufactured by Congressional choices. The agency gets no taxpayer money for its operations but is still under Congress’s authority, and lawmakers have used that authority to impose arbitrary financial requirements and service constraints that have the post service on the verge of bankruptcy. USPS is legally obligated to hold assets in its pension funds that cover the next 75 years of projected pension costs, a unique and crippling requirement that Congress refuses to lift despite evidence that it is almost solely responsible for the agency’s financial woes.

Alan Pyke
Alan Pyke is the deputy economic policy editor for ThinkProgress.org.
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  • WisdomSeed

    Hmmmm…

  • DevonTexas

    Great idea! PayDay “Lenders” are yesterday’s loan sharks. We just made it legal if they do it from a store front.

  • Anonymous

    Brilliant, finally a politician who is learning from foreign success stories. This scheme is some what based on the Japanese Postal Service which is not only financially viable but a successful financial institution, that earns more trust from the public than banks do. Unfortunately, even the Japanese Postal service is now at risk due the emerging right wing pressuring them to sell off their highly successful financial arm.

  • Veteran

    it is, but banks have more lawyers that Warren has supporters in congress.

  • Anonymous

    Just don’t mention “American Indian” and I’m ok with it. Save the uneducated, poor from themselves….getting rid of lotteries is next. Who’s with me on that one?

  • Anonymous

    What a shame about that. I hope they resist that intrusion.

  • amber

    what about credit unions? couldn’t USPS partner with them or follow that model?

  • Anonymous

    There has been plenty of outrage, but as the article says, Congress refuses to lifts its arbitrary and crippling requirements. The fact that these requirements are almost solely the reason for the financial hardship of the USPS, makes no difference to Congress at all. Look for them to fight this wonderful proposal. Any plan that helps the Post Office get out of the hole Congress has tossed it in, will certainly face opposition.
    It is my belief that those in Congress, who are responsible for the financial hardships of the USPS, simply want any excuse (e.g. bankruptcy) to privatize the Postal Service. Companies like Fed-Ex and UPS will be waiting in the wings; not that they’ll do a better job. I’m sure we all remember how Fed-Ex and UPS angered many customers by delivering their 2013 Christmas packages AFTER Christmas.

  • Anonymous

    Did you not read the part about the USPS NOT getting any taxpayer money for its operations?

  • HayesOose

    To re-read the article Mr Hagan would have to have read it once in the first place. What are the odds he did even that?

  • Anonymous

    Alan, do you just parrot what you read about payday loans, or do you do your own independent research? I’d say…you are a parrot. squawk!

  • Jillita Hunter

    I usually love her ideas but the reason most people use those services is not because no banks are available…. it is because they have already been financially irresponsible and have no options left.

  • Anonymous

    By ‘financially irresponsible’ I guess you mean making just enough to feed one’s family? Until you read up on exactly who uses payday loans, I suggest you go back to commenting on plastic surgery and porn stories.

  • Anonymous

    From the report cited in the article, which you might actually read, Heather:

    “Millions of Americans do not have a bank

    account, or use costly services like payday

    loans and check cashing exchanges just to

    make ends meet. The entire underserved

    population comprises more than a quarter

    of all U.S. households — some 68 million

    adults. They are an economically diverse

    mix of working and middle class families,

    poor and unemployed people hurt by the

    recent economic crisis, young people,

    immigrants, and others who are trying to

    make it paycheck to paycheck.”

  • Anonymous

    You’ve put your finger on the reason that cons hate the USPS. They think it’s socialism but the fact that it was enshrined in the Constitution by Franklin and thus protected, galls them. Constitutional socialism is anathema to the troglodytes.

  • Jillita Hunter

    How does one have a family they can’t afford to feed without making the irresponsible choice to breed without secure income? I know exactly who uses payday loans, I have, my friends have, co workers etc…. and I stand by what I said. Just because I have been that person doesn’t mean I’m going to make excuses for it now. Oh, and I don’t take suggestions from people who cannot hold civil discussions.

  • Anonymous

    The scheme is also being used successfully in Italy, France and the U.K. and has been for years.

  • Anonymous

    “…simply do our banking in one of the larger towns…” I live in the same rural zip that you describe and it’s not as “simple” as you pretend. Our local bank was recently swallowed by a conglomerate and due to the fact that it was a loss leader, it was closed down with notes to its clients that we could now use their bank in the next larger town…100 miles away round trip. In fact, in order to close out our accounts we had to drive to the that bank because we weren’t given notice that our local bank was closing. Warren’s solution is sorely needed.

  • Anonymous

    The service pays for itself just as it does in Japan, Italy, France and the U.K. with user fees. Surely the U.S. has the muster to successfully do what others have done.

  • Anonymous

    Please quit generalizing that it’s “Congress” that has done this. Until we name names, nothing will change. It is in fact one political party, Republican, obsessed with privatization that has it in for the USPS. If not for the fact that the USPS was enshrined in the Constitution by Franklin, privatizers would have done away with it long ago.

    That particular political party, Republican, came up with the unique idea of requiring pre-paid pensions in an effort to bankrupt the USPS as an end run around the Constitution. The only other course would be a Constitutional Amendment ending the USPS, which they knew would fail.

  • Morgan Lee Johnstone

    I like the idea, but like someone else said there needs to be criteria.

  • Anonymous

    You really believe people who are poor should not have children? Who gets to choose? How poor? Do people who lose their jobs have to give up their children? What about people who are heartless toward others in their society? Do they get to ‘breed’?

    And, since you know ‘exactly who uses payday loans’, please inform us of all of the facts. You must have read the article, and the report. And yet you still stand by your comments?

    “Millions of Americans do not have a bank account, or use costly services like payday loans and check cashing exchanges just to make ends meet. The entire underserved population comprises more than a quarter of all U.S. households — some 68 million adults. They are an economically diverse mix of working and middle class families, poor and unemployed people hurt by the recent economic crisis, young people, immigrants, and others who are trying to make it paycheck to paycheck…. The average underserved household has an annual income of about $25,500 and spends about $2,412 of that just on alternative financial services fees and interest. That amounts to 9.5 percent of their income. To put that into perspective, that is about the same portion of income that the average American household spends on food in one year.”

    Civil discussions include fact, not one’s faulty suppositions.

  • flamingpanties

    The payday loan industry is a hugely profitable industry with lots of lobbyists, and they won’t want this. Props to Sen. EW if she can get it passed.

    Industry crybabies will be wailing that it hurts small businesses and payday loans help the poor. They’re just hoping the gravy train keeps rolling forever.

  • Anonymous

    The Post Office was historically the “bank of the people” a century ago. Lending, check cashing, currency exchange and such were all handled there when America was not replete with suburban bank branches.
    Of course Republicans will not permit this as:
    1.) It would make the USPS more financially secure when their goal is to privatize it.
    2.) They are beholden to their mobster banking donors who control the “payday lending” industry.

  • Anonymous

    Must be nice, Heather, to be able to hop in your car and simply drive to the nearest city to do your banking.
    Try doing it on foot as many, many in the country must do.

  • Anonymous

    Very surprised that no one here or in the article mentioned that the US Post Office served as a rural bank in much of America for two centuries. Only the advent of big bank politics led to their finally being forced to eliminate that service.

  • Anonymous

    She ain’t talking about auto loans or mortgages. Simple financial transactions like cashing a social security check can and should be done at a post office. Money orders, short-term “pay-day” loans, notary services, small savings or checking accounts… all are easily and economically handled at a more or less convenient location without paying twice for the use of money.

  • Anonymous

    Don’t forget that privatization will certainly mean the end of a large unionized work force. Republicans quite simply cannot stomach organized workers.

  • Ken McNew

    From the USPS web site –

    Postal Savings System

    An Act of Congress of June 25, 1910, established the Postal Savings System in designated Post Offices, effective January 1, 1911. The legislation aimed to get money out of hiding, attract the savings of immigrants accustomed to saving at Post Offices in their native countries, provide safe depositories for people who had lost confidence in banks, and furnish more convenient depositories for working people.

    The system paid two percent interest per year. Initially, the minimum deposit was $1, and the balance in an account could not exceed $500, excluding interest.

    Deposits were slow at first, but by 1929, $153 million was on deposit. Savings spurted to $1.2 billion during the 1930s and jumped again during World War II, peaking in 1947 at almost $3.4 billion.

    After the war, banks raised their interest rates and began offering the same governmental guarantee as the Postal Savings System. In addition, United States savings bonds gave higher interest rates. Deposits in the Postal Savings System declined, dropping to $416 million by 1964.

    On April 27, 1966, the Post Office Department stopped accepting deposits to existing accounts, refused to open new accounts, and cut off interest payments as the annual anniversary date of existing accounts came up. When the system ended officially July 1, 1967, about $50 million in the unclaimed deposits of more than 600,000 depositors was turned over to the U.S. Treasury Department to be held in trust indefinitely.

    An Act of August 13, 1971, authorized the Treasury to turn over the money on deposit to various states and jurisdictions, each sharing proportionately based on its own deposits. Some money was kept for future claims, but under the Postal Savings System Statute of Limitations Act of July 13, 1984 (Public Law 98-359), no claims could be brought more than one year after enactment. Thus, no claims made after July 13, 1985, have been honored.

  • Anthony

    The military only pays via direct deposit. And in boot camp you have the option to select a bank such as Navy Federal. So all service members have bank accounts. This is true since at least 2004 when I joined the navy.

  • Anonymous

    I love the idea. Other countries do this already, why aren’t we?

  • Anonymous

    But beware of Today’s Lobbyists paid for by the Pay Day Lenders. There will be a lot of pressure on our elected representatives by the folks who specialize in negative advertising used to defeat their opponents. Those activities get more time and money than goes to programs that encourage development of policy designed to solve the problems of citizens. Citizens United is NOT representative of the whole electorate. Indeed, they are more intent on upending the citizenry in order to shake out a few more scheckles for the 1%.

  • https://www.facebook.com/rodger.weir/about Lovok

    You answered your own question; because other countries do it. It’s “Un-American”.

  • Jillita Hunter

    I used breed loosely as in to reproduce, I never said don’t have
    children if you are poor, that came from you, I said it is an
    irresponsible choice to have children if you do not have financial
    security. No moral judgement from me either way, just logic. If that is
    the choice you make, the consequences are usually not being able to
    make ends meet.

  • Justin King

    Why on earth do these PREDATORY LENDERS exist in the first place ??

    I know, legislative CORRUPTION.

  • Cvprimerica

    This is a must needed move that would favor USPS and the lower income earners.
    It also provide a hard nock on those predators.

  • Mich Caruso

    How so?

  • Anonymous

    You are exactly right. The 2006 Postal Accountability and Enhancement Act is responsible for the financial hard times that the our postal service is experiencing. You would think that an operation that does not rely on taxpayer money, would be dear to the heart of Republicans. Well, you’d be wrong. When Republicans look at the Post Office, they see a service that is ripe for privatization, or pillaging, by private business. Congressman Darrell Issa is particularly eager to get this underway: http://www.thenation.com/blog/175439/darrell-issas-got-plan-put-postal-service-death-spiral

  • Mich Caruso

    You have not experienced poverty, my friend, although you might believe that you have. No one who has ever experienced poverty would say what you just said.
    When you have three crying, hungry children, your food stamps have been cut, and you desperately want to feed your children, you don’t worry about long term consequences. You will deal with that later. All you worry about is getting some food into your children’s tummies.
    There are a lot of single moms and dads who are just that desperate right now.

  • Anonymous

    Fauxcahontas strikes again. How will this money be handled? Will it be in the form of a check? Or will they give out cash? If it’s cash, how many postal workers will be mugged?
    Don’t these people ever think something through before proving themselves idiots?

  • Anonymous

    “Congress” or Republicans in Congress? Name the culprits in order to hold them accountable. Legislation is but the first step. Such legislation has to be ratified by the states and that’s a steep hill to climb.

  • Anonymous

    Thanks for the info, biocane. I hadn’t been aware of that. It’s worth researching for future discussion.

  • Anonymous

    What you describe is a different issue, Heather. Besides the issue under discussion and your suggestion are not mutually exclusive. Both should be pursued. Moreover, I daresay that most people would prefer not to have to drive 65-100 miles for banking services even if you personally don’t mind it.

    And lastly, your opinion that “Most people who are unbanked …were financially or irresponsible..” comes from where? What’s your source for such an opinion? Having to make unsubstantiated, blanket statements to support your opinion does not give you credibility.

  • Anonymous

    I agree…”hyperbole”. Having to resort to such nonsense is telling. It’s the same sort of absurd argument that Repubs are using in Congress to circumvent the Constitution in order to privatize the USPS. If they think the USPS waiting line is long now, just wait until it’s turned over to a corporation whose only interest is profit instead of the public good.

  • Anonymous

    The model being proposed is not to team up with the banks. The model, as used in Japan, Italy, France, U.K., is publicly run banks with minimal services (checking accounts, small loans, etc.) rather than privately run banks. In essence, the model being proposed is exactly as you propose…a new entity.

  • Anonymous

    You’re out of the loop, Chris. If you read the article or even comments here you’ll know that the “money problems” you mention are contrived by Republicans. Moreover, to complain about the cost of a stamp going up a few cents in order to send something across an entire continent is tantamount to whining like a child.

    The rates USPS charges are competitive with UPS, FedEx or any other private carrier. In fact, many of those carriers deliver their packages to the USPS to be delivered to the recipients. You might consider checking out how many times a day a UPS truck is parked in front of the Post Office.

    And since you haven’t noticed, it wasn’t the USPS that almost bankrupted the world economy, it was the banksters whom you seem to hold in high regard.

  • Anonymous

    If you believe such Fox/Murdoch snake oil then you’ll swallow anything. The fate of Detroit was sealed when Repubs took control of the Michigan gov. Their economic machinations had more to do with Detroit’s fate than a union worker’s $14,000/yr pension.

  • Anonymous

    Wrong! Just ask those municipalities who were gullible enough to allow their water supplies to be privatized, or those who privatized publicly run electric co-ops. They learned the hard way that privatizing the public sector didn’t end well.

  • Anonymous

    Jillita, methinks thou doest protest too much. In fact, your comments are nothing but moral judgements based on a false premise. The false premise being that, if you’re poor you deserve it.

    Moreover, it’s disingenuous on your part to make the claim that “I never said don’t have children if you are poor…” while at the same time declaring that “I said it is an irresponsible choice to have children if you do not have financial security.” What’s the difference? No matter how you word it, the sentiment is the same.

  • Ray Houthuysen

    Let’s copy France. Sure.

  • Ray Houthuysen

    The bankruptcy court disagrees.

  • http://www.praybuddy.com/ Chris Gagner

    You are right.. I don’t have 3 children.. I’ve never been on food stamps… so if that’s the definition of poverty, then I’ve never experienced it.

    I have lived on my own making minimum wage.. living in a run down, drug infested apartment community, qualified for food stamps but refused to take it… and worked my way through college with no help from my family who lived 600 miles away. But I guess I’ve never experienced poverty.

    I know what I said above sounded harsh, but my wife used to work for a Payday Loan company here in TN. It seems like EVERYBODY uses payday loans.. she even had doctors coming in to get these things. And it really frustrates me because it’s the absolute WORST loan you could ever take out. Once you start doing it, you’ll never be able to stop, and it will suck the life out of you. Payday loans are right up there with drugs and the lottery as the fastest way to sink yourself deeper into poverty. So if I sounded as if I was angry with the people who take out payday loans (I did call them brainless..) I am sorry. That’s just misdirected anger. I just hate payday loans not the people.

    It’s a really sad situation, but I don’t think giving them MORE access to payday loans is going to fix the problem.

  • Jillita Hunter

    That may be how you interpret it, and you have every right to do so, however I meant what I said exactly as I said it. How is it a moral judgement to say choices have consequences? I am not saying it is the wrong choice, all choices have consequences… btw way you are so far off base with the assumption that I think people who are poor deserve it it is awesome because I truly did laugh out loud at that. :-) Not all poor people use payday loans.

  • Jillita Hunter

    Your right I made an assumption but not about poor people. Not everyone living in poverty uses payday loans.

  • Jillita Hunter

    I have three kids, have been on food stamps, still make less than 20k a year and agree. Payday loans do not change the situation for people they just put it on hold then make it a thousand times worse.

  • Anonymous

    Now you’re playing with words. Whenever one resorts to semantics, it speaks volumes.

    Of course choices have consequences. But you’re not speaking in general; you’re specifically assuming that anyone who is poor (not having financial security) is poor because of the consequences of their own actions and thus should not have children. And then you call your opinion “logic” instead of a moral judgement, which as you note, you have every right to do so but that doesn’t give you the right to credibility.

    Yours is a cruel, simplistic argument that doesn’t take into account life’s vicissitudes. What if one had children before the banksters took their home or before the trickle down economy eliminated their job? Maybe the only course they have left to survive is a payday loan.

    Moreover, none of what you’ve written has disproven or placed in doubt the subject of the article itself. Sen. Warren’s proposal would help many of us and not just the poor. Scapegoating the poor as a red herring in order to cast doubt on Warren’s proposal is telling.

  • Someone Who Knows

    To clarify, most “good players” in the payday loan industry actually require a bank account to fund a payday loan. Without a bank account, there is no way to ensure deposit of the loan funds and withdrawal of the loan payments. Also, a bank account statement is an important underwriting tool to ensure that the consumer can pay the bank back. The majority of payday loan consumers are not people who don’t have bank accounts, they are people who are a high credit risk. Poor credit, terrible credit, etc. For these individuals, if faced with (as an example) a $400 auto repair job, how are they going to pay it? They need the car to make it to work to earn the money they do have, and if they do not have reliable transportation, then they could lose that job. They have poor credit, so no banks will lend to them. What is the solution? A payday loan, perhaps. If they are approved, they can pay for the car repair, and they can keep their job. And for those ignorant folks saying “pay half back in fees” or whatever, the typical rates of fees on these loans is $15-$30 per $100 borrowed. That’s 15% to 30% interest. Now, everyone talks about APR because that’s the buzzword. APR is an annualized rate. A payday loan is typically only 2 weeks or so. So, the APR is really a horrible metric to utilize here. If they pay off the loan in two weeks, as they are supposed to, then their interest rate is just 15-30%. Pretty reasonable, if you ask me. Now, why is the USPS idea a bad one? Sure, the rates would be lower, which is great for the borrowers. No argument there. But do you understand why the rates are higher for payday loans? Because of the credit risk and rate of default. So, if the USPS begins lending to this demographic, the same credit risk and high rate of default will still be present. Only with them, the USPS won’t be collecting enough in costs and fees to make up that difference. And, eventually, they will lose money. Period. These are facts. And this USPS idea is a bad one.

  • Jillita Hunter

    Oh my, your so far off base as to my thoughts and opinions you have no idea. :-) You seem highly educated and will obviously run circles around me debating. You say the proposal will help many of us… how many people do you personally know that use payday loans as they exist now, not once as an emergency but on a regular basis?

  • Anonymous

    I don’t know you so I readily admit that I have no personal knowledge or idea of the type of person you are. All I have to go on is your words, which is what I’m addressing here in quotes. Rather than blaming me for being off base, you might consider the consequences of your own words instead.

    Warren’s proposal was only nominally about payday loans. Her proposal was about much more than that. Therefore, I reiterate, “Sen Warren’s proposal would help many of us and not just the poor.”

    You’ve been trying to change the subject to just one aspect of her proposal when it’s about much more. In that regard, to answer your question, I know an entire town that would benefit from her proposal on a regular basis. And there are many more small, rural towns that would benefit as well. The fact that such publicly run banks would possibly eliminate predatory practices like payday loans, extravagant fees, unnecessary penalties, would be a plus as well whether one is poor or not.

  • Anonymous

    Because there’s a market for what they offer – some people truly have no other options. As Mom used to say “When you’re poor, you always pay more.”

  • asif

    India has been doing this for last 50 years, esp in rural areas.

  • Jean Valjean

    Who said anything about mail carriers carrying money? They never even mentions mail carriers. They only talked about post offices and they mentioned that there are post offices in places where there are no banks.

    Clearly, you had a negative opinion before you even read this and found whatever you could that was negative…

  • Dude

    I can’t think of anything more silly than this. Have the Post office become a bank? Let’s just get a whole new bloated government organization set up – forever and ever. The Post Office has become largely obsolete. It needs to be cut back dramatically. We don’t need a new quasi government agency offering bank services at a huge loss. The taxpayers will just end picking up the whole mess and it will never end.

  • Anonymous

    You think paying $520 to borrow $375 is outrageous? Just wait until the USPS takes over.

  • Anonymous

    Well, NASA’s mission is supposed to be outreach to Muslims. The IRS is now in charge of healthcare and the stamp-out-free-speech campaign. The NSA is now the political arm of Obama, monitoring all emails, phone calls, and web visits of Americans instead of the terrorists. Why not let the USPS become the new predatory lenders? Mail a letter. Get $200. Makes sense.

  • Anonymous

    Ms. Warren is under the illusion that her dear, bloated, overpaid, featherbedded Federal Government is more compassionate, for the little guy, and will, well, just make it “feel” better to be ripped off by a predator, if the the USPS does it, instead of the private snakes. After all, it’s the Government. They are always there for your best interest. They can’t run a mail system without losing $6 billion a year, but you can bet they will run the most efficient predatory lending business that ever existed!

  • Anonymous

    A stacked deck.

  • Anonymous

    Really? How do you think people who can’t get to the banks are going to get the money? Is it going to be in cash or a check? Really, this sounds like a bunch of crap that will never fly since there are far more banks than post offices. Being from a rural area myself, I’d say the ratio of banks to post offices is 4 to 1. Since the PO has cut back so drastically and combined satellite offices, it would be so much easier to get to a bank.
    It sounds like this is only a scheme to prop up the postal service more than to help people out. Of course we all know the House and the Senate would “never” do something without really understanding what a proposed law would do and the unintended consequences.
    Just as an exercise, take any particular zip code, and count all the banks, credit unions, etc, that are in that zip code. Then count the number of post offices in that zip code. How does it stack up? It doesn’t.

  • Anonymous

    In the United States, the United States Postal Savings System
    was established in 1911 under the Act of June 25, 1910 (36 Stat. 814).
    It was discontinued by the Act of March 28, 1966 (80 Stat. 92).

  • Dude

    I am aware of the positions and arguments you indicate, but that is not what the discussion is about. Its about ADDING a bunch of new functions and services to the USPS. The age of getting mail in your box is fading. I think that is apparent to anyone that sends emails every day. That said, there will be some need for the USPS going forward. It might just be for deliveries two or three days a week. Elizabeth Warren is proposing drastically changing the current purpose of the post office. I used to be a bank teller. There is no way the postal service is set up to handle what she is proposing. It would be a boondoggle and it would become another bloated, money losing mess and a disaster for the Post Office. This is all very well intentioned, but implementing it would be very very difficult. Look at how the affordable care act was implemented.
    If the USPS changed its mission, politics would intervene, there would be zillions of new make work and patronage jobs created. Massive losses would ensue. You already noted that the USPS is a “political football” and you are correct.. The government simply does not do things like this well. It never has and it never will. It will become an even bigger political football if you add these new services.

  • jthurman1

    Someone who can’t afford to have children should not have children. What is so hard to understand about that? It’s wrong to knowingly bring a child into poverty or government dependence.

  • Jean Valjean

    Why don’t you try reading the article thoroughly. They never say that mail carriers will bring money to your door. They do say that there are areas that are basically “bank deserts” but that still have a post office.

    Does it stack up? Yes. I can go west of where I live and find a lot of people living in areas where there are no neighborhood banks. These people don’t use banks because they use public transit and it’s inconvenient to get to a bank. We can get in our car and drive there. They have to wait for a bus, then walk a few blocks from the bus line. This can take an hour or more of waiting each way. But there are often post offices which are closer.

    Be that as it may the point of all this is to provide an alternative to predatory lenders which is something you don’t even address in your gripe. Banks aren’t willing to give small loans and poor people have to resort to predatory lenders and why not use the Post Office since this is one of it’s original purposes?

  • Anonymous

    “These people don’t use banks because they use public transit and it’s inconvenient to get to a bank.”

    OK you really make no sense at all. If they can;t get to the bank, how will they get to the post office? Your argument lacks reason since there are far more banks than post offices.
    But then you say the postal carriers won’t be carrying the cash or checks. Then how are the people supposed to get the money?
    Seriously, I’d think that if you say conditions are as bad as you claim in your city, there would be a mass exodus.
    In the rural areas, there is usually a bank, be it large or small, in every town. Obviously in towns less than 5000, the possibility is lower. However, to cut costs, the post office has already closed the offices in those towns as well. But then, we happen to live in fly-over country where running out of beer on Friday noght doesn’t constitute a major emergency. Also we have this thing called “trust” out here. If you do have an emergency, people are willing to wait for their money. We seem to be a little more independent that way and rely less on the government. But then that’s the way we were raised. If you don’t have something you need, either substitute or do without untill you can afford it.

  • Jean Valjean

    I explained it clearly. Sorry you missed it. The post offices are in their areas and they can get to a PO easier than they can to a bank. At any rate, the banks often don’t offer small loans so that’s really a non-issue anyway even if they are close by.

    I don’t the problem in the Post Office expanding it’s services.

    You keep talking about the rural areas as if they are the only people in the world. Many predatory lenders target urban centers and military bases. One emergency or late paycheck can cause a vicious cycle of loans that cost people a lot of money.

    It’s great that small towns have trust and will give you credit like that. I’m sure you can see how that may not exist in large population centers and how the PO can help those people who don’t have the same resources as those in rural areas.

  • Anonymous

    Used to be here in the US too. I don’t understand why people in our country have forgotten that.

  • Anonymous

    Are you trying to make fun of the First People names?

  • Anonymous

    Are one of the many making sure women can’t get birth control or abortions?

  • Anonymous

    I can see a few problems with this idea. The post office, for the most part, is open 8-5, M-F and maybe 8-noon on Saturday. If the working poor are the target, won’t they be at work? Will they need to extend post office hours to service these folks? If so, that will only contribute to the post office’s budget woes.
    The other is an image issue. After some very quick searching, I found that the default rate on pay day loans is from 5 to 20%. When the post office has to refer these defaults to collections, how long until organizations like Think Progress start complaining about the poor being harrassed by the collectors hired by the post office? SInce most people still equate the post office with the government (wrongly) this will be seen, and spun, as the government after these poor people.
    As for the banking “deserts” are there really post offices in the depths of Detroit and Baltimore and other places like that?
    As to the post office being forced to fund it’s pension, maybe 75 years is excessive, but state and local government pensions are underfunded to the tune of Trillions of $. Maybe more of that needs to be done.

  • Anonymous

    There was a post office savings bank from 1911 until 1967. That’s how silly of an idea it is. I’m much more confident with JPM taking care of my savings. Please explain to rural America how the post office is largely obsolete. Especially the parts that don’t have internet access.

  • Anonymous

    I’m hoping that Warren does not run. I believe she can be more effective in Congress, especially if we can get more of her ilk into Congress. From what I have seen of Hillary I find it hard to imagine she would select her as a running mate.

  • Owen Johnson

    And all of your assertions and predictions are proven facts, I suppose. Or just your overly negative opinions?

  • Owen Johnson

    It seems like some people commenting here didn’t read the article. Senator Warren isn’t talking about replacing banks or having the USPS compete with them. She’s talking about having the USPS compete with outfits like Moneytree. My daughter can’t get a bank account and doesn’t really want one because she has trouble managing money on minimum wages, so she cashes paychecks at Moneytree and pays a fee to do so. This is exactly what was referred to in the article: “The Postal Service (USPS) could spare the most economically vulnerable
    Americans from dealing with predatory financial companies under a
    proposal endorsed over the weekend by Sen. Elizabeth Warren ” That and payday loans at outrageous interest rates.

  • Dude

    I would suspect that there was a reason the Post Office stopped being a “banK” in1967. Also, Warren is talking about starting up a new organization. There is no infrastructure from the old organization, so realistically the fact that the PO used to offer some kind of bank service almost half a century ago is not relevant any more. I said “largely” obsolete. I did not say obsolete.

    There is a need for some type of post office, but realistically not one of the current size. Times have changed. I use a computer to write letters, not a typewriter. When times change society is supposed to progress, not regress.

    Also, the idea of setting up a massive quasi governmental organization to address the needs of a relatively small group is crazy. The cost per transaction would be incredibly high. Lets look at the business side.

    Warren is proposing to set up a nationwide post office bank for a relatively small group of people with generally bad credit. This new organization would have massive overhead relative to the size of the population served. The population served would have a high default rate that would then require a large collections organization and infrastructure. That looks like a big money losing proposition to me. When the new PO bank experienced losses, the general population of tax payers would have to pick up the bill. I am sure that would engender a lot of political support over time.

    Its easy to dream about cupcakes and ice cream, but I can’t imagine how this could possibly work unless the PO bank charged very high fees – just like the pay day lenders. I am not being negative – I am being realistic. Its a horrible business model even if you assume the objective is just to break even.

    Does anyone at the USPS actually like this idea?

  • Dude

    Owen, that is not a logical reply. That said, if my comments are that far off the mark, please support your position of seeming support for Ms. Warren’s concept with a brief business like outline as to how this new PO organization would not lose money hand over fist.

  • Anonymous

    Your arguments are presented well, I just disagree with them. We could quibble about details, probably better than Congress, if the idea ever gets that far. Any argument I would make would revolve around it has been done, it can be done and other countries are successfully doing it. Kind of like healthcare.

    I will pull out one statement you made. “When times change society is supposed to progress, not regress.” I’m guessing the key word here is “supposed”.

  • John Earl

    This is a great idea, if the predictable reaction to it by Tea Party Republicans and spineless Corporate whore democrats can be overcome.

  • The Thinker

    Great Idea. Great Idea. Elizabeth is a creative problem solver with the wisdom to see real issues. Thank you.

  • Anonymous

    Even without being an entrepreneurial genius, if I ran a company that had a federally-protected connection to EVERY household in America– in other words, a monopoly, I would consider myself having a huge advantage over FedEx and UPS. Even with that advantage, if I could not compete with them due to exorbitant retirement benefits, then I would need to consider reducing those benefits. It is a disservice to everyone, including the taxpayer, to promise things you cannot deliver. Relative to Congress forcing the USPS to pre-fund these benefits — now that’s an idea that needs to catch on with Social Security and Medicare. Then, and only then, would the American people realize there is $100 trillion currently UNFUNDED in these programs.

  • Anonymous

    There are 93,000 bank locations in the USA. There are 31,272 USPS retail offices in the USA. So, tell me again how the “working poor” being disadvantaged by the banks? The whole foundation of this idea is just another fabricated bogey-man by the leftists. If the working poor are not using the banks, it’s because they don’t want to.

  • Anonymous

    There are 60,000 more bank locations in the US than there are Post Office locations. Tell me again how the “working poor” are disadvantaged by the banks? If they are not using banks, it’s either because they have no valid ID, or just don’t want to.

  • Dude

    Further to my previous comments, let me get this straight. Ms. Warren wants to spend a ton of money getting the PO to set up banking facilities to lend money to people with poor credit. That does not sound like a viable model.

    People don’t go to pay day lenders if they have a credit card that they can still use. So, I would assume that people that are going to pay day lenders are somewhat desperate and have either defaulted on their credit card payments or are unable to get credit cards because they have no credit history. In other words, many of these people are tapped out and are not good credit risks.

    Chris, would you lend YOUR money to the people I just described at say, 5 pct interest per year? Do you think you could make money doing that? Do you think you could break even lending at a 5 pct interest rate? If you don’t, then i would suggest that it is probably not a good idea to have the tax payers of America doing that either. My guess is that it would be difficult to break even at 15 pct..

    Its always easy to throw around other peoples money it seems. My general rule of thumb is that if I would not do a deal with my money, I would not do it with someone else’s money. Maybe Ms. Warren should consider that concept. Isn’t that what she criticizes the big banks for doing?

  • mercedes1947

    Of course there will be glitches, problems, setbacks, that is expected with anything that involves a big, really big shift, in this case. But to simply sit back and say: “It won’t work, it won’t work, it won’t work, doesn’t help.
    They will have to hire more people and keep longer hours, so yeah, there is that. More hours means more hires. That is good.
    One person below wrote that the default on payday loans 5 – 20%. I’m not sure why the wide disparity there but the reason the default is so high is because the apr on some of these loans in over 300%. If you have keep rolling it over. It is impossible for some to keep up with that. The idea is this!!! Lower interest rates will give the paycheck to paycheck people a breather. It’s not a perfect idea, but it is a good idea in a political landscape devoid of any good ideas except for Warren.

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