The Post Office Could Provide a Public Option for Banking

This proposal has been around for awhile; Elizabeth Warren endorsed the idea a few months ago.  And now legislation has been introduced in Congress by Rep. Cedric Richmond, D-New Orleans, which would allow the U.S. Postal Service to offer basic financial services — check cashing, savings and checking accounts and small loans.  This would be a Godsend for millions of low-income people who don't have checking or savings accounts.  Payday lenders  — America's favorite sleazebags — would become practically irrelevant.  And the U.S. Postal Service would earn back some of the billions of dollars they've lost because of Congress' mandate that all postal employees' retirement benefits must be pre-paid several decades in advance.

Needless to say, the banking industry's congressional prostitutes will never ever agree to such Communist claptrap.  Helping the Post Office?  Helping poor people?  Government bureaucrats meddling in the loan shark industry?

But the good news is, the Postal Service might be able to implement this plan without congressional approval.  It's too bad everything has to be accomplished via executive authority because of our corrupt gridlocked Congress, but there you have it.  When there's a giant blob of shit blocking the highway, you have to take a detour and go around it.

The Postal Service used to offer small savings accounts.  Congress put a stop to this in the 1960s (three guesses why).  But according to the Office of the Inspector General of the Postal Service, the precedent for these banking services has already been established.  Post Offices wouldn't be starting something new; they'd simply be reinstating a service they used to offer.

This will be open to different interpretations, of course.  And with the 2014 midterm elections coming up, what are we waiting for?  Sounds like a campaign issue to me.  

Let's see, which of these themes will resonate more with the public?

A)  Helping the Post Office avoid bankruptcy, and simultaneously saving millions of banking consumers from being ripped off; or

B) Sympathy for those poor payday lenders who might actually have to start working for a living.

Let the soundbites begin.

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.

“Why Does Congress Insist on Destroying the Postal Service?”

That's the title of this article.  It's a rhetorical question, of course.

As you probably know, in 2006 the lame-duck Congress passed a law requiring the U.S. Postal Service to pre-fund all of its employees retirement pensions for the next seventy-five years.  This is billions of dollars beyond what any other government agency is required to do.

And you can't even blame Republicans for this law; plenty of Democrats voted for it too.  The Postal Service tried to eliminate Saturday delivery and close their most remote little-used branches.  Both of these cost-saving moves are heavily favored by the public.  Congress said NO.

And the trillion-dollar-plus spending bill that will probably be passed this week clearly stipulates:

“6-day delivery and rural delivery of mail shall continue at not less than the 1983 level,” and “none of the funds provided in this Act shall be used to consolidate or close small rural and other small post offices in fiscal year 2014.”

Sounds like one of those “Unfunded Mandates” that conservatives always used to scream about.

In other words, stop spending so damn much money, and quit coming up with all these cost-cutting ideas, you cheap bastards.

As the linked article says:

“Lawmakers want the Postal Service to run itself like a for-profit business, but they retain the right of final say over all its major business decisions.”

Imagine driving up to an intersection and seeing a bunch of signs saying “Do Not Enter!”  “No Stopping!”  “No Right Turn!”  “No Left Turn!”

That's about the level of Congress' “reasoning” here.  What motive could Congress possibly have, if not the ultimate elimination of the U.S. Postal Service?  (Another rhetorical question.)

FedEx and UPS have both purchased a lot of expensive friendships in Congress.  And they'd probably love to get rid of their pesky competitor.

Even more importantly, a lot of people vote by mail.  In at least one state, all voting is done through the mail.  So many well-funded rightwing organizations have worked tirelessly to make sure all voters have at least five pieces of identification before they vote, and to eliminate extended voting and early voting.  These dedicated voter suppression efforts are all in vain if voters can just mail in their ballots.

Get rid of that damn Post Office already!