Bernie Sanders's Highly Sensible Plan to Turn Post Offices Into Banks - TheAtlantic

[WillyT]

Bernie Sanders's Highly Sensible Plan to Turn Post Offices Into Banks
They're much less crazy than payday-lending services, and the rest of the world agrees
Joe Pinsker - TheAtlantic
|4:27 PM ET

<snip>

In an interview with Fusion’s Felix Salmon the day after last week’s Democratic debate and published Tuesday, Senator Bernie Sanders discussed the marquee features of democratic socialism he’s been tirelessly calling for during his presidential campaign: higher taxes for the wealthiest Americans, an increased minimum wage, and breaking up the biggest Wall Street banks.

Salmon also raised a possibility that has not been as prominent in Sanders’s stump speeches, but animates him nonetheless: turning the U.S.’s post offices into banks. Sanders:

If you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it.

It’s something Sanders alluded to in a 2014 Wall Street Journal op-ed, and it’s not even the craziest idea proposed to save the USPS—a report last year explored the implications of turning post offices into hubs for 3-D printing.

In fact, Sanders’s idea is quite sensible. “Postal banking”—which just means that post offices run savings accounts, cash checks, and perform other basic financial services—is common in most of Asia and Europe, and only about 7 percent of the world’s national postal systems don’t offer some bank-like services. Postal banking is a really good way to reach people who haven’t had access to standard savings accounts. One estimate figures that more than 1 billion people have used post offices for making deposits.

The reason why this would be so useful in the U.S. is that somewhere between 20 and 40 percent of the population has to rely on check-cashing or payday-lending services...

<snip>

More: http://www.theatlantic.com/business/archive/2015/10/bernie-sanders-lets-turn-post-offices-into-banks/411589/

[TM99]

1. Great plan!

I fully support it.

[kelliekat44]

54. Originated elsewhere, though.

http://blogs.reuters.com/felix-salmon/2014/02/03/why-the-post-office-needs-to-compete-with-banks/

But if Hillary proposed it she would be accused of stealing someone else's idea.

[TM99]

63. Yes, because don't you know,

everything is always about Clinton.

[George II]

77. No, seems everything is about Sanders - there was no excitement around here when this...

....was first proposed in late January 2014- 21 months ago:

http://www.huffingtonpost.com/elizabeth-warren/coming-to-a-post-office-n_b_4709485.html

[kelliekat44]

94. Even before this. Been around for a while. nt

[global1]

93. I Don't Care Where The Idea Originated - Bernie Is Giving It Life.....

He's bringing this idea to the forefront - where others didn't or couldn't.

Bernie's been trying to do everything he could to save the Post Office. The Repugs want to shut it down and privatize it. This banking idea just supports other ways he's talked about to save the Post Office.

[zipplewrath]

2. They used to

My father remembered having a Postal Service base savings account.

[nuxvomica]

37. I did not know that

But your post spurred me to look it up. By 1947, they had $3.4 billion in deposits.

https://en.wikipedia.org/wiki/United_States_Postal_Savings_System

[arcane1]

3. Once again the U.S. is on the trailing edge..

I think it's a great idea. Hell, I was only able to get a checking account this year! This would've come in most handy, especially since I was buying money orders at the P.O. anyway!

[msongs]

4. open separate gov't banks, PO service is slow enough already. sorry this window is closed etc nt

[pnwmom]

6. They don't have to be understaffed. They are because the Rethugs have been steadily draining

the system of cash, by bogus retirement charges 75 years into the future, for people who haven't even been hired yet.

[Snotcicles]

7. ^^ exactly ^^ nt

[SoapBox]

24. Ditto to your Exactly!

[Plucketeer]

12. That's the truth!

They built two new facilities here in town - then closed them down. But NOT for lack of customers.

[karadax]

20. It was a 10 year funding plan starting back in 2006

Only one year to go then maybe they can use some of that cash to reinvest in infrastructure and hire more people.

[sulphurdunn]

28. Or even born.

[daleanime]

35. +1

[TexasTowelie]

39. In the small town (9,000) where I live there is only one window at the post office.

I usually don't have to wait when I go there, but having a bank there seems out of the question to me. They would have to add a significant amount of space for vaults, money counting rooms and computer systems.

The previous town where I lived had a population of about 15,000 and only three windows. Every time I went there I did have to wait in a line. The building is too small to expand and most of the time parking at that location was horrible.

There would have to be significant improvements in infrastructure and adding personnel (people besides those that work at the window) in order to make this plan work. On a scale of 1 to 10 I would give this proposal a 2 of being adopted.

[JDPriestly]

64. In my area in Los Angeles, we have a lot of payday lending "businesses."

They take their customers for all they are worth quite literally in many cases.

Our post offices are large enough to accommodate savers and savings accounts.

Maybe the post offices would offer this services in some urban areas and then see how it works and later expand if it works well.

Most countries have this.

A lot of banks charge you if your savings account is under a certain value. These post office accounts would be for small savers.

Maybe they could sell government bonds too?

If your post office is too small, then this service probably wouldn't be offered in it. If you have banks that will allow people to deposit relatively small amounts of money into savings accounts, you wouldn't need it.

[TexasTowelie]

67. The banks in this area do have monthly account fees

charged if the holder doesn't maintain a minimum balance and I suspect that many people do not maintain an account where I live.

When I lived in Irving (over 200,000 people) the main post office that I used was comparatively large with five windows. The wait times were fairly long and a trip there usually exceeded 30 minutes and sometimes approached nearly an hour. However, they would need to make substantial enlargements to the building to accommodate new teller windows, computer equipment and room for new employees.

There would still need to be a huge amount of infrastructure installed that I mentioned previously along with additional training for the front-line employees along with hiring security, accounting staff and computer technical services. Those are considerable expenses that would need to be paid from services that are supposedly being set up with minimal profit revenues.

I do agree with you about the payday lending business though. However, most of the outrageous fees come from people borrowing money and paying the associated usurious interest rates. Some of those companies do act as cash checking businesses that charge 2%-3% fee on payroll checks; however, most of them do not cash third party checks. The fact that sometimes those checks bounce means that post offices would have to maintain a reserve balance for those deposits or they would be technically insolvent. I also believe that if you are only cashing a payroll check then you go to a grocery store and pay approximately the same rate as would be paid to a cash checking company.

As far as the post offices selling government bonds are concerned, I doubt much of that is going to occur for people with minimal assets. If people are living that close to the margin then they don't have sufficient liquidity to lock their money into government bonds which currently pay less than 5% that are not inflation protected and less than 1% for Treasury Inflation Protected Securities. https://www.treasurydirect.gov/govt/rates/pd/avg/2015/2015_09.htm

Finally, there is the issue of the postal powers clause of the Constitution. If banking authority is extended to the post offices then it will give further reason for libertarians and conservatives to complain about privatizing the postal service altogether since the underlying effect would be a government subsidy for these services. Somehow all of these costs have to be paid by someone. The most logical way is for fees to be assessed to the people that benefit from those services which somewhat defeats the purpose of allowing the post office to get involved in this business, or they are paid by postal customers with increased rates, or the taxpayers fund the entire enterprise.

While the idea sounds good in theory, I think that the practical aspects of such a plan are daunting. As someone who is struggling financially now, I would prefer for the government to invest in other areas such as improving public transportation and health care rather than expanding banking services to the post office. I can live (and have lived) without a bank account and it is a minor inconvenience, but having quality health care and the means to travel to attend appointments are definite necessities.

[snort]

78. It's the only retirement plan

they ever pretended to give a fuck about.

[SomeGuyInEagan]

87. ^^THIS^^ A million times ^^THIS^^

nothing to see here, move along

[Scootaloo]

86. Nice to see something we can agree on, pnwmom

[LoveIsNow]

18. I think part of the rationale behind this is to find new revenue

for the post office. That way they won't have to be understaffed.

[Sheepshank]

5. over 45 years ago while lliving in the UK

Post offices acted like banks for savings accounts. I was a child and savings was my only financial interraction so I don't know if they offered any other banking services (also realizing checking accounts were rare and I don't even remember credit cards back then).

....I guess I'm saying this isn't a grand new or unique idea...but there's nothing wrong with repurposing ideas either. I don't understand rasing the issue of payday loans since post offices should not be performing loans services with the tax payer money.

[greatauntoftriplets]

9. Back then, many rural Irish post offices also included a pub.

So people on the dole could pick up their checks, cash it against their post office accounts and then drink it up!

[sulphurdunn]

32. Sure. Why not?

Sounds like it would have a good multiplier effect and a third of it wouldn't be siphoned off and out of the communities by loan sharks. What's the problem? A dollar is a dollar is a dollar.

[greatauntoftriplets]

36. The punts (at that time, never dollars) would be spent on drink and not on groceries.

[sulphurdunn]

43. Sounds good to me.

[appalachiablue]

8. K & R. Excellent service for Americans and support for the USPS. Let's do it!

[Thespian2]

10. K & R!!!

[Cheese Sandwich]

11. Great idea. nt

[Plucketeer]

13. I sure hope he makes good mention of this in the next debate

This would make life SO MUCH easier for many, many folks - not to mention put a BIG dent in the god damned PayDay Ripsters!

[vt_native]

14. The other major candidate in the Dem primary

Would never go for this. Her major donors, the big banks, wouldn't like a limitation of their ability to put the screws to the poor.

[Uncle Joe]

15. Kicked and recommended.

Thanks for the thread, WillyT.

[oberliner]

16. Would the Post Office be providing loans?

I am not sure I understand why a bank would not allow a low-income person to open a savings account.

It seems like they would have trouble getting loans from banks, certainly, but I don't think you need much to open a savings account at a bank, do you?

[ColesCountyDem]

17. Most banks want $25, minimum, and charge a maintenance fee.

Just looking at my bank's website, and it requires a minimum deposit of $25, unless you are 17 or younger, and charges $4/month as a maintenance fee.

[Sheepshank]

22. it seems like banks generally charge more fees than a Credit Union

my savings is free if I keep at least $25 in there.

[sufrommich]

23. I don't understand why anyone would use a bank instead of a credit union.

I think a better idea would be to have a national credit union.

[ColesCountyDem]

26. Because many communities don't have credit unions.

There's not a single credit union in my county, actually.

[sufrommich]

27. Wow.They're all over the place where I'm at.

I'm in the Detroit area and I can remember when credit unions were limited to union members and state workers,however they've grown to large enough numbers that I can use my debit card for free all they way up the state and in the UP where my parents live.

[ColesCountyDem]

30. Much of rural America is a terrible place to be poor.

Few or non-existent credit unions are just the tip of the iceberg, unfortunately. Being poor in rural America is a very different-looking creature than it is in the cities and suburbs.

[sufrommich]

31. I don't doubt that's true in many areas,my

parents live on a small island which has its own credit union,maybe it's a Michigan thing. That being said,I like the post office idea.

[ColesCountyDem]

44. I like the idea, too.

My paternal grandparents came here from Wales, and they always thought the absence of postal savings banks was a bit peculiar.

[davidpdx]

70. I think the same idea as a credit union would still work in theory

[oberliner]

41. Would a Post Office be able to have a lower minimum and not charge fees?

If so, wouldn't they lose money on those accounts?

[Half-Century Man]

19. Been floating around for years, we don't do it because Members of congress run payday loan services

3 of the first 5 in a DuckDuckGo search
http://www.newrepublic.com/article/116374/postal-service-banking-how-usps-can-save-itself-and-help-poor
http://www.thenation.com/article/why-we-need-bank-post-office/
http://www.huffingtonpost.com/rj-eskow/post-office-banking-could_b_4727935.html


Protectors of the Payday loan industry
http://thinkprogress.org/economy/2014/01/27/3209121/issa-payday-lenders/
http://www.browardpalmbeach.com/news/congressman-alcee-hastings-bribed-by-payday-loan-industry-7311534
http://boingboing.net/2009/04/05/congressman-whos-giv.html

[Hydra]

57. Right, and because we haven't had enough muscle at the top to make it happen

But maybe now we can. This has been one of my shelved projects until enough support was there, glad to see it getting some press again.

[AzDar]

21. K & R

[liberal_at_heart]

25. Different. I love it.

[cantbeserious]

29. K&R

eom

[nationalize the fed]

33. USPS should also provide competition to eBay

why stop with banking?

Ebay needs competition. The USPS has even more to offer than Ebay- dispute resolution (nothing like an armed postal inspector to keep people honest), physical stores everywhere, etc

Instead of spending >$2000 per second on bombing and invading lands 8,000 miles away how about the US Gov subsidize the USPS.

[LiberalArkie]

34. The U.S. used to have saving stamps that you could get at the post office.

[valerief]

38. Using post offices as banks is a terrific idea. Post offices could be used for so much more

if we didn't have an oppressive Congress.

[tclambert]

40. Banks won't like the competition, so Republicans won't like it.

Maybe if the Post Office also sold guns we could get the Republicans interested.

[Kang Colby]

42. What's wrong with credit unions?

I don't understand why people can't go to credit unions or other local banks that don't charge fees. If people are fine paying for check cashing services, why wouldn't they just go to a normal bank? I'm genuinely curious about this.

[winter is coming]

45. Where are you going to find a credit union in a food desert?

Dunno about where you live, but the payday loan places thrive in areas where I don't see credit unions or local banks.

[Kang Colby]

46. How often do you see post offices in those areas?

I'm not trying to argue anything by the way. I have honestly no clue but I am a big fan of credit unions.

[winter is coming]

47. A hell of a lot more often than I see banks, actually.

I volunteer in a food desert and there's a post office less than a mile away. Banks, not so much.

I'm not averse to people using credit unions or local banks, but if that were a possibility for these folks, they wouldn't be going to payday lenders and check-cashing joints.

[Kang Colby]

48. Understood.

When I was a teenager and working construction, Thursday was payday. The guys would stop at a Mini-Mart that had check cashing services in a rough neighborhood near the company's shop. The store had a fee or you could elect to spend money at the store I think. The guys would go in, grab some cold beer, and get their checks cashed. I did this too a few times, especially when I was in high school. My assumption was that these men were in all likelihood ineligible for banking services due to past indiscretions with checks. I do believe they should have a road to redemption though, if that was the issue.

[Marty McGraw]

85. When I lived in Reno

For a short bit, it was the casinos where one could cash a paycheck; for those who didn't ever have enough to start a bank account with.

[Samantha]

49. I think another service post offices could perform is registering voters

This would be especially helpful in rural areas where red states are suppressing voting and/or just making it plain inconvenient to impossible. I don't think a local government could shut down a Federal office. Additionally, the people who deliver the mail are often very familiar with the residents in rural areas and that would be an additional hurdle for people trying to meddle with the results to overcome.

Sam

[WillyT]

52. + 1,000,000,000 - What You Said !!!

Most Excellent Idea !!!

[bonniebgood]

74. Bingo Samantha. I always thought th USPS should be a place to register

and vote. After-all voting places are held at Gov. Public schools and Public libraries. Postal workers especially Carriers, knows EVERYONE IN THE NEIGHBORHOOD.

[Samantha]

81. I am so glad you like this idea - I posted this once before here

No one liked the idea. One person said it would never work.

Do you think I should drop a note into Bernie Sanders inbox and ask him to mull it over. It would be a great campaign issue for him to champion. The Post Office has one of the largest unionized work forces in the Country, if not the largest, and that is one reason the Republicans would like to take it down....

Sam

[SomeGuyInEagan]

89. God, yes. Great idea. n/t

[PosterChild]

50. Great idea!

Im not an sanders suporter, snd , frankly I don't think most Americans would support it, but I think it's a good, sound idea.

[orpupilofnature57]

51. Real solutions !!!!!

[retrowire]

53. Hey! I learned something new about Bernie from this thread!

And I LOVE this idea!

Wow! The Post Office could be used for so much more. And the user above me that said that the Post Office should be a place where one could register to vote?

BRILLIANT IDEA.

[uberblonde]

55. It's not his plan.

The postal workers union has been asking to have this reinstated. We used to do it until '67, IIRC.

[WillyT]

58. And... Your Point Is ???

Who else is standing up for the postal service...

It sure isn't the Republicans... or most Democrats that I've heard of.

[DemocraticWing]

59. Imagine, a politician that listens to organized labor.

It would be nice to have some of those in charge again.

[WillyT]

61. + 1,000,000,000 - What You Said !!!

[Maineman]

56. Bernie has lots of really good ideas because he is not owned by the status quo profiteers.

No doubt he listens to sincere honorable people rather than tunnel vision ideologues, for-hire lobbyists, political schemers, and nut case radicals. He says what makes sense rather than what certain certain people what to hear. Hillary, who are you listening to?

[kelliekat44]

68. This was someone else's idea several years ago. Bernie has just agreed with it. If Hillary

did the same thing she would be accused of copycating.

[d_legendary1]

91. I doubt anyone would boo HRC if she wanted to save the post office

If anything she would be praised for keeping something that is written in our constitution off of government hands. The only times she's gotten ridiculed is when she agrees with the same positions Sanders already holds, like Keystone pipeline.

[Live and Learn]

60. Wow, I wasn't aware of that. Thanks for the info. nt

[LittleGirl]

62. Our primary bank is the post office here

We live in Switzerland and there are post office banks and ATMs all over the country which is what my husband preferred to get when we moved here a year ago. His reasoning was that there were post offices all over the place so getting money would be simple and cheap. They also had the best services and costs (or lack of costs) depending on your balance. Getting direct deposit made the account free.

Their on-line banking security is top notch. We were given a PIN pass thing that allows you to log in from home with a mobile type device that offers up passwords to use that change every minute or so.

They offer all kinds of other services and one of them is my cell phone service. I bought the phone in the states before we left but needed the SIM card and got the service at the post office. This allows me to call the states for FREE anytime I want. There are restrictions that suck like roaming fees that are out of this world expensive but if you stay in the country most of the time, it's not a bad deal. And keeping in touch with my 83 yo Mother is very important.
Side bar:
The only issue we had when we opened the account was the freaking IRS reporting laws that make expats like us struggle. Sure the IRS wants to find American tax cheats but we aren't one of them and won't ever be millionaires so it would be great if the IRS would exclude people like us. Our post office account was frozen for 3 weeks after we opened it, simply because we had to file extra paperwork for the IRS. This was the worst thing to happen to us as we were in the process of moving. Having a frozen bank account caused unnecessary and unneeded stress.

This bank (post office) was the best option for us having a bank account here. UBS was the only other alternative and they charge 3% just to keep your money there, eff that. All other banks in Switzerland reject American account holders because they REFUSE to report to the IRS (an outside agency that has no barring for compliance in the EU, which makes complete sense). So once they unfroze our accounts, we were relieved. But beware, if you're an American wanting to live abroad, you may not be able to open a bank account, thanks to the IRS. We're the only country in the world that forces its expat population to report income from abroad every freaking year.

[PatrickforO]

65. This is a really good idea.

Too bad the Republicans would fight tooth and nail against it.

[djean111]

76. Democratic corporatists would fight it tooth and nail, too. n/t

[Scuba]

66. ISP's too, please.

[SomeGuyInEagan]

88. Cedar Falls, Iowa ...

Back in the early '90s, the municipal Cedar Falls Utilities had a bit of a surplus. They could have sat on it, given refunds (ala Jesse Venura pissing away the state of Minnesota's surplus in the late '90s - would have helped with the predictable down times came in the early '00s) or they could invest it.

Invest they did.

At the time, there was already a private cable company offering cable and internet service (as well as dial up services ... this was the mid-90s). CFU decided to start up its own cable/internet services and used that surplus to do it. Quickly, residents had a choice for cable and high-speed internet service.

[Scuba]

90. My community has a nice ISP offering. The local Republicans love it but don't know it's socialism.

[SomeGuyInEagan]

92. Damn that pesky Socialism ... improving lives ...

... even for the Republicans who support it.

[Enthusiast]

69. Kicked and recommended to the Max!

[davidpdx]

71. South Korea, where I live, has postal banks

There are two separate lines, one for the customer who want to postal services and one from banking services.

[Vinca]

72. That's an excellent idea.

[raouldukelives]

73. Shareholders been trying for years to kill it and feast on the carcass.

How awesome would it be in the face of that monumental resistance for the USPS to come back stronger than ever?

A sad day for shareholders is a good day for liberty.

[MineralMan]

75. I remember this:

https://en.wikipedia.org/wiki/United_States_Postal_Savings_System

In fact, when I was a kid, I had a Postal Savings Account for a while. The system ended in 1967, but I had already withdrawn my funds by then.

[George II]

79. This concept was introduced by the Postmaster General 21 months ago - January 2014.

[MineralMan]

82. Yes. It would be a revival of something that was a commonplace

earlier. I had paper books full of Post Office Savings stamps. When I was a kid, I'd save up my spare change and any found money and go to the Post Office and buy Savings Stamps when I had enough change. My parents promoted this idea and I followed through with it. I'd also collect soda bottles and take them to the store to get the deposit on them and add that to my stash of coins to be used to buy savings stamps. In 1963, when I first went off to college, I cashed it all in and use the money to buy books for my first semester at school.

You could also buy savings bonds and certificates of deposit at the Post Office. Those paid interest - 2% - if I remember correctly. You could also exchange your savings stamps for bonds and certificates as well.

Even though the program ended in 1967, you can still redeem the stamps, although you have to mail them off to receive their value.

An expanded small-scale banking systems at the USPS would be welcome, I think. No fees. No charges. Just savings.

[George II]

83. When it was proposed 21 months ago, I wonder what Senator Sanders said about it and what, if...

....anything, he did to get it formally introduced?

[MineralMan]

84. I don't actually know. He may not have said

anything about it, though. It's a non-starter in Congress, I'm sure. The Republicans seem to be bent on destroying the USPS.

[Spirochete]

80. Great idea

Someone could rob the bank, and mail the money to himself, so he wouldn't get mugged on the way home.

[MADem]

95. This idea--and I have been a fan of it and have said as much here on DU--has been around for years.

I am glad he is revisiting it, but it's not his 'plan.'

It would be a boon to economically bereft areas.