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.