The U.S. banking establishment has been at war with the post office since at least 1910, when the Postal Savings Bank Act established a public savings alternative to a private banking system that had crashed the economy in the Bank Panic of 1907. The American Bankers Association was quick to respond, forming a Special Committee on Postal Savings Legislation to block any extension of the new service.
“The average underserved household spends $2,412 annually – nearly 10% of gross income – in fees and interest for non-bank financial services. More than 30,000 post offices peppered across the country could service these needs.”
Pretty good income stream for the USPS, but how will this help the “underserved household”? They still gonna have to pay the fees.
Privatizing the USPS would be a huge mistake. The “people” have to have a way to send real mail and packages away from the profit vampires of neo-liberal economic privatizing everything to insure profits that aren’t taxed enough already. The more things that are in the hands of profit vampires the more it costs average hard working Americans already strapped to the gills to survive. If Congress can spend over a $trillion a year on the military they can keep the USPS out of the hands of profit vampires. I’ve been hearing about the USPS “problem” my whole life. The “people” have to have a way to send mail and packages away from profiteers. Oh yeah, there are other “choices” to send things if desired so I don’t give me that bulls**t line about “choice”, the neo-liberal standard line of utter nonsense. BTW I am a member of a credit union away from the biggest vampires on the planet, the black banking vampires.
No. The point is that the USPS Bank could charge much lower fees and still manage to be modestly profitable.
This is a moderate socialist proposal that is well within the extremely limited parameters of the U.S. political economy. And it has about as much chance to succeed as even the most moderate gun controls or any other kind of moderate reforms.
Brown has written eloquently before about the highly successful Bank of North Dakota, which is under continual attacks as it is the sole publicly-owned state bank in the U.S. It is a last vestige of Upper Midwestern populism and must be erased of course.
Unless alternative political parties and power centers are organized and exercise the power, we are lost.
Will the fees be lower?
And I call “bullshit” on this Republican lie! One of the favorite things in their playbook is to first hamstring an agency and sabotage its ability to perform its mission; then to use the results of their sabotage as an argument for more privatization, which always costs more, for the simple reason that “investors” and private equity firms expect and demand double-digit returns.
Those returns come from net profits, after all operational expenses. Do the math. Don’t fall for their shell game any more!
When the neocon libertarian privatizers finally drive this country to the precipice of Armageddon ( we’re very close right now at 2 minutes to midnight !), then, hopefully, advocates of the public/planetary interest still left standing will take the reigns. One of the first things we will do is set up a postal banking system to raise up our underprivileged and the just-getting-by, with the Grameen banking model in mind. The ideologues now in power will be exposed for the hypocrites and thieves they are and Congress will pass the NEED Act, HR 2990, creating a sovereign currency and vesting the Treasury with the power to manage it. The Fed and its coterie of private usurers will be tossed out onto the ash heap of history and life on the planet will have a chance to continue and prosper.
I hope somebody does cost/benefit analysis before they do that. The USPS does not own an ATM network so they will have to either piggy back on an existing one (fees will start right there), build their own (probably not cost effective as their cor business is not banking) or work the the ol fashioned way, by having teller cash checks.
It’s bad enough they’ve been forced to prepay pension benefits for employees that have yet to be born. Let’s not impose anymore hardship on them. The USPS is doing great job delivering packages and letters at process much lower then other carriers so let’s let tyem stick to that.
I’m not sure what you envision the problem to be. The cost of the machines is fairly trivial compared to the cost of securing locations for them. The USPS has 31,585 locations and it owns essentially all of them and they have the people to staff them already built in - the extra walk-in business from the banking operation would improve, not reduce, their profitability. Establishing an ATM network and keeping fees low would be easy if congress allows it.
For some international context
As you can read, the British post office bank before it was privatised was the bank instrumental in creating the free-to-use national ATM system - LINK
At the very end of that year, Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under PAEA, USPS was forced to “prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” — meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn’t even hired yet, something “that no other government or private corporation is required to do.”
As consumer advocate Ralph Nader noted, if PAEA was never enacted, USPS would actually be facing a $1.5 billion surplus today:
Exactly. Now how much investment will need USPS to built up a network like that?
BTW, nothing is free-to-use. Someone was maintaining those machines, the network that used to communicate with each other and whatnot. My guess is someone was paying those people from some stash of cash. The USPS right now does not have that.
Hey, as long as the USPS can conjure a free ATM network complete with machines secure connections, staff and all. By all means go for it. Plus, according to the article, most people that will be in need of this operation have minimal to no savings, so where is capitalization come from?
Also, the article mentions “the USPS could expand into retail lending for underserved sectors of the economy,”, usually the riskiest part of lending, hence the high interest rate to cover losses.
I like free stuff as much as everyone else, but let’s b e realistic.I don’t really want to bankrupt the USPS. I rather have cheap and guaranteed delivery of mail.
Nothing free about it - it’s just a public option for an unserved part of the population. Check cashing services is a no-brainer considering the rip-off prices that payday lenders charge (remember they are cashing the checks from employers in that case - not a high risk situation). The point isn’t that they will offer everything for free - but they will offer services at a lower cost than commercial banks and payday lenders would because they would have several structural advantages.
With post offices open 5 or 6 days a week in 30,000 plus locations why would ATMs be needed ?
I have never needed an ATM and function in the mainstream perfectly well.
When I had a consulting gig with USPS 20 years ago I noticed that post offices in areas with a lot of hispanic workers (who sent money to relatives south of the border) sold wads of money orders because they were the most internationally secure and widely accepted (south of the border) financial instrument, bar none.
By all means. As long as they turn a profit or minimally break even, go for it.
By the way, you seem to be confusing payday lending with check cashing. Two totally different tings.
You well may be right that Johnny-come-latelys will have lost the initiative. And we know that innovators are often bought out.
But here is a link to LINK
LINK is a not-for-profit membership association owned and governed by card issuers and ATM operators. This allows LINK to keep costs and fees at a minimum, and maintain its position as the scheme of choice for UK ATM transactions.
I’m a retired postal worker in the UK and have experienced how privatisation is done by a thousand cuts and in a drip by drip process, producing a case that inevitably results justification for full privatisation. I worked through the early days of automation and computerisation and witnessed the many wasted opportunities. I even saw the valued recognised trade mark Royal Mail changed to Consignia until the mistake was rectified…at a cost, mind you.
No - I was not. I was referring to “payday lenders” as the name of that industry - not as an identification of a specific service (loaning money in advance of a paycheck). Simply cashing employer checks without getting ripped off is an important issue for the working poor - because it is the payday lending industry that is currently serving that need at exorbitant rates. The issue of whether there would need to be a different charge for cashing checks that are not from employers is another matter, as they do indeed bear increased risk.
Another reason for the drive to privatize the USPS, not mentioned here as yet, is the hope of snatching all its real estate in prime downtown locations for pennies on the dollar.