How to Marginalize Payday Lenders AND Help the Post Office
Senator Elizabeth Warren has endorsed the idea of allowing the U.S. Postal Service to replace a lot of the payday lenders that are monopolizing the poorest neighborhoods. The Post Office would use its huge already-existing infrastructure to offer debit cards and small loans to millions of low-income workers. These are the people who don't have enough money to open a bank account and are therefore at the mercy of payday loansharks.
People who don't have a bank account spend about ten percent of their income just to access their own money. In addition to saving these people billions of dollars, the Postal Service would be adding $9 billion to its own coffers.
The Postal Service would be operating in partnership with banks. Big banks' reputations are getting more and more damaged (in case they care) by their partnerships with payday lenders. Banks that work in conjunction with the Postal Service will still have as many customers as they've always had, without the PR disaster caused by their association with payday loansharks. It's a win win.
Roughly sixty percent of all post offices are located in a bank desert — a zip code that has one or zero bank branches. These are the exact neighborhoods that are easy pickin's for payday lenders and would be helped by the Post Office's new banking service.
I'm glad Elizabeth Warren is pushing this idea. She has that unbeatable combination of populism and pragmatism. No wonder Republicans hate her.
Labels: bank desert, Elizabeth Warren, payday lenders, U.S. Postal Service
posted by Tom Harper @ 7:31 PM
5 Comments:
Given that republicans hate both the Post Office and Warren, I am sure they will be against this idea.
It is a great idea but here’s what the article missed. I remember when decades ago the Payday lenders were the scum of the banking Industry and in spite of their obscene lending practices and interest rates, the best Congress could do to “regulate” was to pass a law keeping them a certain mileage from Military bases so they don’t rip off our underpaid service men and women (who must now drive farther for the money). Then two that happened over the decades changed things:
1. They joined all the Banking Industry Groups thereby getting in bed with the “legitimate” banks, but more importantly getting their protection and use of the same lobbyist the bankers already enjoy.
2. They either got bought out or merged with Banks, who waited in the wings not only observing how much money they were making off customers they never wanted, but also no matter how much they screwed these people over, Lawmakers never did anything to them.
They are well entrenched now, I wouldn’t give this proposal much of a chance.
Erik
Why would Congress want to do anything that makes sense? As Jerry wrote that Warren and the PO are favorite targets of the Right, so also are the people who would use this service the most, po folk. The Right just loves to hate po folk.
What a great idea. I just love that woman.
Jerry: Yup, they hate Warren, the Post Office and those needy parasites who deserve to be robbed by payday loansharks.
Erik: Your right, it doesn't stand much of a chance. Congress isn't owned by the Post Office or the people who get robbed by payday lenders; it's owned by the banks (including payday lenders).
MRM: Damn right, them po folk can pull themselves up by their bootstraps, get a job, open a bank account and quit sniveling.
Jim: Me too. If Hillary doesn't run in 2016, I think Elizabeth Warren would be the best candidate.
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