Elizabeth Warren wants to turn Post Office into a bank (1 Viewer)

[Slapdash]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

On its face this could make sense, but when the government contracts out work typically it just hurts the tax payers more. Seems like this would be rife with bribes (err...lobbying), privatized profits, and socialized losses.

 

[humpback]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Completely false.

 

[Rich Conway]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Interesting idea also.

 

[Rayderr]

This is an absolute no brainer, and of course no one should be surprised that the resident anti-govt FFAers are siding with payday loan scammers over the USPO.

What if we';re against payday loans in general?

Huh?

You said that if we're against the Post Office idea that we must therefore be siding the payday loan people. That's a false dichotomy. It is possible to be against hte payday loan practices and be against the post office idea.

 

[T Bell]

Here's the scenario I see playing out:

The post office goes into business as a financial services center, but offers lower costs to customers because it is government subsidized. This is justified in part by those who hate the check cashing and payday loans industry as being usurious. Predictably, a number of competing entities in the private sector go out of business.

After a period of time, the USPS (again) is losing money, so it now ups the effective rates of interest that it charges its customers so as to cover the losses. The costs the customers are now bearing are quite similar to those they were paying when they were doing business with the private companies years before. The prior moral indignation is forgotten as this is all justified as being "necessary".

Effectively this would mean that the government would engage in predatory pricing to edge out competitors and grab market share in an industry that operates legally but is morally objectionable to some people.

 

[tom22406]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Interesting idea also.

I kinda like this a little better.

 

[SaintsInDome2006]

Here's the scenario I see playing out:

The post office goes into business as a financial services center, but offers lower costs to customers because it is government subsidized. This is justified in part by those who hate the check cashing and payday loans industry as being usurious. Predictably, a number of competing entities in the private sector go out of business.

After a period of time, the USPS (again) is losing money, so it now ups the effective rates of interest that it charges its customers so as to cover the losses. The costs the customers are now bearing are quite similar to those they were paying when they were doing business with the private companies years before. The prior moral indignation is forgotten as this is all justified as being "necessary".

Effectively this would mean that the government would engage in predatory pricing to edge out competitors and grab market share in an industry that operates legally but is morally objectionable to some people.

Like health insurance.

 

[HellToupee]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Completely false.

Not completely false but not totally accurate.

 

[Yankee23Fan]

Here's the scenario I see playing out:

The post office goes into business as a financial services center, but offers lower costs to customers because it is government subsidized. This is justified in part by those who hate the check cashing and payday loans industry as being usurious. Predictably, a number of competing entities in the private sector go out of business.

After a period of time, the USPS (again) is losing money, so it now ups the effective rates of interest that it charges its customers so as to cover the losses. The costs the customers are now bearing are quite similar to those they were paying when they were doing business with the private companies years before. The prior moral indignation is forgotten as this is all justified as being "necessary".

Effectively this would mean that the government would engage in predatory pricing to edge out competitors and grab market share in an industry that operates legally but is morally objectionable to some people.

I can see that happening.

 

[T Bell]

These are my concerns as well. This appears more about getting a chunk of the $89 Billion that the "poor" spend on pay-day loans and check cashing than actually helping them. Its made clear in the fact that OIG hopes that USPS could get 10% of that business or $8.9 Billion dollars. In the end the "poor" will still be paying out the same amount its just that Uncle Sam will be collecting it. Instead of the check cashers and pay day loan establishments. It seems that Sen. Warren is more concerned with the USPS making money than she is with the "poor" getting shafted.

None of that is in the Warren op-ed. Her expressed concern is that the poor are getting shafted.

Her op-ed expressly talks about helping the USPS shore up its financial footing. The OIG says that if 10% of the check cashing and pay-day loan business shifted to USPS it would be worth $8.9B. She wants to help the poor by turning the USPS into a pay-day loan and check cashing establishment. There are already a ton of those in poor communities. Will the USPS charge lower fees than the established competitors? While this might trigger a race to the bottom on fees, which could be of benefit to the poor, I dont see it really happening. The USPS isnt as ubiquitous in the inner city as they used to be. Will a poor person be willing to walk past 2 or 3 other check cashing/bill paying establishments to get to the neighborhood post office? Nearly every corner convenience store, liquor store of neighborhood grocery in the inner cities offer check cashing and bill pay services of some sort. This seems more like an attempt to prop up the USPS than it is to help the poor.

In the entire op-ed, there is half a sentence about USPS shoring up its financial footing. It isn't the emphasis of the article at all. Warren's expressed motivation is to help the poor.

Yes, and moral crusades are notorious for being cost-ineffective, which is precisely what we don't need with the already inefficient and expensive USPS.

 

[bushdocda]

They should turn them in to weed dispenseries.

Mail some weed too, they can still mail stuff if they want.

 

[Ministry of Pain]

Wow, great find and article. It's true that poor people and middle class continue to be squeezed.

Great idea and a way to turn all that property into usable space and attract more customers. At least the female senator is forward thinking with this.

 

[Politician Spock]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate. They would have to charge ridiculously high rates to cover the payroll given how many defaults subprime borrowers produce. They wouldn't be much different than what we have now in payday loan scammers. If the banks could do it better than the payday loan scammers, they would.

The only way the post office is going to make banking cheaper for these areas is to operate at a loss. Something they know how to do very well.

 

[fatguyinalittlecoat]

So the idea is:

1. We entrust a government agency that most do not trust to deliver anything over $20 with our savings and property; and

2. We have a US Senator with presidential aspirations who would like to see the US government take control over your personal property.

Well, what could possibly go wrong.

Neither of your two statements bears even a slight resemblance to what we're actually talking about.

I admit my reading comprehension can be awful.

So we're not talking about private citizens handing their money over as deposits to post offices across the country?

Any actual banking services (as opposed to non-bank financial services) provided at the Post Office would be in partnership with existing banks.

 

[Slapdash]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

 

[CBusAlex]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Yeah, I'm not really sure what problem Warren/the FFA's idea is supposed to solve. If it's that check cashing and payday advance services are too expensive, I don't see any reason to think the government could provide them more efficiently. If it's that post offices have unused capacity, then the best solution seems to be leasing out the excess space, closing down some offices, or relocating them to smaller and cheaper facilities.

 

[humpback]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Completely false.

Not completely false but not totally accurate.

It's completely false.

 

[humpback]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Plenty of companies do pre fund their retirement benefits. It's really the only way to accurately account for those costs in the present day. Part of the problem is that the government wasn't doing this and as a result was severely under reporting their liabilities. So now when you suggest an entity as important as the post office should use sound fiscal practices, it becomes "impossible".

I'll give you $1 for every company the size of the USPS or larger that funds their retirement accounts 70 years out because that's what they choose to do.

I don't know about size, but in 2011 it seems 25% were pre funding in some capacity.And there's even been some recent government actions in regards to pensions as well. My employer is one of the few that still offers pensions (partly because of government policy apparently) and they sent me a whiney letter about costs going up because of one of Obama's transportation bills. It had to be revenue neutral, so they went after pensions and started charging higher premiums among other things.

Moving Ahead For Progress in the 21st Century Act (yeah, they have to fluff up the names to make you smile while you bend over): http://en.wikipedia.org/wiki/Moving_Ahead_for_Progress_in_the_21st_Century_Act

Pre-funding is a common practice. Pre-funding 70 years out is not. It's a ridiculous burden to place on anyone. That's why private companies don't do it. But the USPS has to do it.

Please stop feeding the trolls. When you quote and respond to clowns like Dr J who most of us have on ignore, we have to see his diarrhea.

I don't put people on ignore. It's childish. You don't want to see it, put me on ignore. It would help me greatly.

 

[msommer]

So now Post Offices are going to have armed guards and metal detectors like courts? Nice.

They should consider putting them on the empployee entrance as well

 

[humpback]

Here's the scenario I see playing out:

The post office goes into business as a financial services center, but offers lower costs to customers because it is government subsidized. This is justified in part by those who hate the check cashing and payday loans industry as being usurious. Predictably, a number of competing entities in the private sector go out of business.

After a period of time, the USPS (again) is losing money, so it now ups the effective rates of interest that it charges its customers so as to cover the losses. The costs the customers are now bearing are quite similar to those they were paying when they were doing business with the private companies years before. The prior moral indignation is forgotten as this is all justified as being "necessary".

Effectively this would mean that the government would engage in predatory pricing to edge out competitors and grab market share in an industry that operates legally but is morally objectionable to some people.

I think it's more likely that the taxpayers would end up footing the bill.

 

[The Commish]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Completely false.

Not completely false but not totally accurate.

It's completely false.

Is your issue with the use of the word "only"? If so, I'd agree, but as of last August, the pension funding was a substantial part of their problems. Do you disagree?

 

[Rich Conway]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Yeah, I'm not really sure what problem Warren/the FFA's idea is supposed to solve. If it's that check cashing and payday advance services are too expensive, I don't see any reason to think the government could provide them more efficiently. If it's that post offices have unused capacity, then the best solution seems to be leasing out the excess space, closing down some offices, or relocating them to smaller and cheaper facilities.

This is a good post.

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.

For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

 

[fatguyinalittlecoat]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Yeah, I'm not really sure what problem Warren/the FFA's idea is supposed to solve. If it's that check cashing and payday advance services are too expensive, I don't see any reason to think the government could provide them more efficiently. If it's that post offices have unused capacity, then the best solution seems to be leasing out the excess space, closing down some offices, or relocating them to smaller and cheaper facilities.

This is a good post.

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.

For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

 

[Mr. Know-It-All]

Why is the post office such a sacred cow? It either has a good business model or it does not. If it does not then let it be marginalized against commercial companies that provide similar service. Is it a right to mail a letter? With the advent of electronic banking and payment processing there is no real need for the Post Office. As long as it can sustain itself with its current self-funding let it live, but if more government is needed to keep it going let it die.

 

[humpback]

This has worked very well in Europe. There is no reason to believe they couldn't provide these services and make a nice profit. Of course they would be profitable now if not for the stupid retirement thing Congress put on them.

Ever heard the phrase "F--- up a wet dream"? That's what our government does. Like clockwork. I like the idea a lot, but have zero faith in our government to pull it off especially given their love affair with big business.

Exactly. On the surface it seems to make sense to try and provide as many services as possible - this is part of what Walmart does. Then you realize that you're talking about an entity that has found its way into the red by failing to operate even remotely efficiently in the face of changing technology and you have to think twice.

The Post Office is only in the red due to a ridiculous rule that says they must have their pensions funded for 70 years. If not for that provision the Post Office would have turned at least a billion dollar profit in 2012.

Completely false.

Not completely false but not totally accurate.

It's completely false.

Is your issue with the use of the word "only"? If so, I'd agree, but as of last August, the pension funding was a substantial part of their problems. Do you disagree?

Well, that's basically his whole post. Yes, the pension funding is a big part of their problems (yeah govt), but even if you removed them completely (which would be absurd), they still had an operating loss in fy 2012. Not sure where he's getting they would have had made a billion dollars from, but I guess it sounds nice.

 

[Ministry of Pain]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

I agree 100% here. I bank at Citi, Chase is across the street and I wanted to cash a check there as it was issued from Chase and leaves a little less of a paper trail. She wanted to charge me $10 initially and I simply said OK, I do bank across the street but…immediately she says she is gonna do it for free today and invited me in to open an account with them anytime.

Also, I have said this many times but Citi does not charge us a monthly check/savings fee and their ATMs are free at all Publix locations, and 7-11 down here where Citi has all the ATMs int he stores. I never pay a penny to touch my money.

 

[Slapdash]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

 

[St. Louis Bob]

Hey, ya know what else poor people spend a lot of their money on? Food. And you know how much profit is being made? Let's make this a convenience store too. Government could probably turn some profit. You know what else the poor spend a lot of money on? Clothes. We need an aisle for those here. Government could probably turn some profit. You know what else poor people spend a lot of money on...

You do know this proposal would be for using Post Offices in places where there is no bank. And this isn't like selling food. Last time I checked you didn't pay fees to get your food, You didn't pay usury rates to pay for the food.

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

Not to mention it's made by poor people.

 

[KCitons]

Why is the post office such a sacred cow? It either has a good business model or it does not. If it does not then let it be marginalized against commercial companies that provide similar service. Is it a right to mail a letter? With the advent of electronic banking and payment processing there is no real need for the Post Office. As long as it can sustain itself with its current self-funding let it live, but if more government is needed to keep it going let it die.

I agree with you on this for the most part But, part of the blame for the failure of the post office lies with the government. Not that anyone would care, but using the PO as an ATM machine and then tossing it's employees aside, sets bad example going forward.

What's next, Madoff for President in '16

 

[SaintsInDome2006]

So the idea is:

1. We entrust a government agency that most do not trust to deliver anything over $20 with our savings and property; and

2. We have a US Senator with presidential aspirations who would like to see the US government take control over your personal property.

Well, what could possibly go wrong.

Neither of your two statements bears even a slight resemblance to what we're actually talking about.

I admit my reading comprehension can be awful.

So we're not talking about private citizens handing their money over as deposits to post offices across the country?

Any actual banking services (as opposed to non-bank financial services) provided at the Post Office would be in partnership with existing banks.

So the US would be leasing out Post Offices to banks?

 

[humpback]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

 

[Slapdash]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

 

[T Bell]

i would be more interested in the USPO selling kiosk space to a private provider for these services, with a government-determined max interest rate / fee structure. More similar to a Wal-Mart model. At least allows some form of competition, as the various lenders compete for the opportunity to be the vendor.

The post office has the real estate locations, their chief asset. They do not have management/worker expertise for these services.

Yeah, I'm not really sure what problem Warren/the FFA's idea is supposed to solve. If it's that check cashing and payday advance services are too expensive, I don't see any reason to think the government could provide them more efficiently. If it's that post offices have unused capacity, then the best solution seems to be leasing out the excess space, closing down some offices, or relocating them to smaller and cheaper facilities.

Most post offices do occupy prime retail real estate.

The issue here is that this more ideological than economic. Warren even says she wants to "help poor people", but also part of this is that the USPS doesn't want to shut down post office locations as that will also restrict access to USPS services. That the focus is NOT on economics is going to guarantee that you're going to get a non-sustainable economic model.

 

[T Bell]

Here's the scenario I see playing out:

The post office goes into business as a financial services center, but offers lower costs to customers because it is government subsidized. This is justified in part by those who hate the check cashing and payday loans industry as being usurious. Predictably, a number of competing entities in the private sector go out of business.

After a period of time, the USPS (again) is losing money, so it now ups the effective rates of interest that it charges its customers so as to cover the losses. The costs the customers are now bearing are quite similar to those they were paying when they were doing business with the private companies years before. The prior moral indignation is forgotten as this is all justified as being "necessary".

Effectively this would mean that the government would engage in predatory pricing to edge out competitors and grab market share in an industry that operates legally but is morally objectionable to some people.

I think it's more likely that the taxpayers would end up footing the bill.

It would be both.

 

[IvanKaramazov]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

If they were profitable customers, banks would take their business. Banks aren't in the habit of turning down profit.

 

[fatguyinalittlecoat]

So the idea is:

1. We entrust a government agency that most do not trust to deliver anything over $20 with our savings and property; and

2. We have a US Senator with presidential aspirations who would like to see the US government take control over your personal property.

Well, what could possibly go wrong.

Neither of your two statements bears even a slight resemblance to what we're actually talking about.

I admit my reading comprehension can be awful.

So we're not talking about private citizens handing their money over as deposits to post offices across the country?

Any actual banking services (as opposed to non-bank financial services) provided at the Post Office would be in partnership with existing banks.

So the US would be leasing out Post Offices to banks?

No. Just refer to the OIG White Paper if you have specific questions.

 

[humpback]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

Still not following. Don't see why banks would turn down profits, or how the USPS (with negative profit margins) would be a more efficient way of handling these customers.

Basically, it seems this is being portrayed as a "win/win", which I don't really think adds up.

 

[SaintsInDome2006]

So the idea is:

1. We entrust a government agency that most do not trust to deliver anything over $20 with our savings and property; and

2. We have a US Senator with presidential aspirations who would like to see the US government take control over your personal property.

Well, what could possibly go wrong.

Neither of your two statements bears even a slight resemblance to what we're actually talking about.

I admit my reading comprehension can be awful.

So we're not talking about private citizens handing their money over as deposits to post offices across the country?

Any actual banking services (as opposed to non-bank financial services) provided at the Post Office would be in partnership with existing banks.

So the US would be leasing out Post Offices to banks?

No. Just refer to the OIG White Paper if you have specific questions.

Ok, I just skimmed some of the pages - it sounds like the US government will be receiving money as deposits.

Look at page 10 - checking and credit services are available.

How is that not holding citizens' money on deposit?

 

[SaintsInDome2006]

Looking at this thing...

http://www.uspsoig.gov/sites/default/files/document-library-files/2014/rarc-wp-14-007.pdf

...it just sounds like banking services.

People can already go to a bank for this stuff without the government "holding" your money.

 

[Rich Conway]

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

It is different to me in this context, yes. For example, food stamps should probably be considered "helping poor people", and we have that program in place specifically to help poor people, not to prevent unscrupulous "insert food stamp business here" from preying upon the poor. I'm suggesting that "punishing/preventing unscrupulous check cashing businesses from preying on the poor" isn't enough of a reason for me to support this policy.

Intuitively, I like the suggestion, but I feel like the reason it appeals to me is emotion based simply because I want to punish what I consider to be sleazy check cashing businesses. For the same reason as "ick" isn't a good reason to support bans on gay rights, "ick, sleazy" isn't a good reason to support a policy of increasing government responsibility and power.

"Helping poor people" is an entirely different reason to me. To support it, I'd at least want to know the following: 1) can government provide these services more efficiently (i.e. cheaper to the consumer), and 2) while adhering to #1, can the government provide these services in a deficit neutral fashion. Also, I'd want to ensure that government would play by the same rules as the private providers. Even then, I'm not certain this is really the proper role of government (I'm not certain it's not either, but I prefer to err on the side of small government when in doubt), which is why the idea of simply leasing space within the post office to private providers appeals to me.

 

[fatguyinalittlecoat]

I'm trying to figure out a way to respond to SaintsinDome where I don't have to admit that I was wrong about the stuff that I was accusing him of being wrong about. Somebody help me out here.

 

[msommer]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

Still not following. Don't see why banks would turn down profits, or how the USPS (with negative profit margins) would be a more efficient way of handling these customers.

Basically, it seems this is being portrayed as a "win/win", which I don't really think adds up.

The marginal cost for a bank to serve the poor might well be higher than that of the post office, given that one of the issues the post office has is not enough business.

 

[SaintsInDome2006]

I'm trying to figure out a way to respond to SaintsinDome where I don't have to admit that I was wrong about the stuff that I was accusing him of being wrong about. Somebody help me out here.

That's ok, man, I usually assume I'm the one missing something. Thanks for discussing and providing the link.

 

[msommer]

Looking at this thing...

http://www.uspsoig.gov/sites/default/files/document-library-files/2014/rarc-wp-14-007.pdf

...it just sounds like banking services.

People can already go to a bank for this stuff without the government "holding" your money.

The whole premise is that the banks won't serve the people in question...

Whether that is true or not I do not know.

 

[msommer]

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

It is different to me in this context, yes. For example, food stamps should probably be considered "helping poor people", and we have that program in place specifically to help poor people, not to prevent unscrupulous "insert food stamp business here" from preying upon the poor. I'm suggesting that "punishing/preventing unscrupulous check cashing businesses from preying on the poor" isn't enough of a reason for me to support this policy.

Intuitively, I like the suggestion, but I feel like the reason it appeals to me is emotion based simply because I want to punish what I consider to be sleazy check cashing businesses. For the same reason as "ick" isn't a good reason to support bans on gay rights, "ick, sleazy" isn't a good reason to support a policy of increasing government responsibility and power.

"Helping poor people" is an entirely different reason to me. To support it, I'd at least want to know the following: 1) can government provide these services more efficiently (i.e. cheaper to the consumer), and 2) while adhering to #1, can the government provide these services in a deficit neutral fashion. Also, I'd want to ensure that government would play by the same rules as the private providers. Even then, I'm not certain this is really the proper role of government, which is why the idea of simply leasing space within the post office to private providers appeals to me.

IF the poor really can't get the service they need at an affordable price then don't see why the government should not look at it. Agree that it would have to improve the operating income of the post office (and at least be profitable in itself).

 

[Rich Conway]

I'm trying to figure out a way to respond to SaintsinDome where I don't have to admit that I was wrong about the stuff that I was accusing him of being wrong about. Somebody help me out here.

How about...

We're off on a tangent where we discuss whether it would be good policy to allow the Post Office to serve in a "Western Union" capacity, regardless of what the actual suggestion in the OP says?

To be honest, I like that discussion better than whether the Post Office should be an actual bank. Turning it into a bank with deposit accounts seems considerably more fraught with issues.

 

[SacramentoBob]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So the govt legislated away the ability for banks to provide these services so they could could complain these services didn't exist and offer them itself. No conflicts there.

 

[Dinsy Ejotuz]

Seems like a great way to attack usury (which was outlawed for centuries in most countries around the world until the US stripped away consumer protections against it in the 20th century).

 

[msommer]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So the govt legislated away the ability for banks to provide these services so they could could complain these services didn't exist and offer them itself. No conflicts there.

Not quite. The banks still have the ability to do these services. They just don't find them attractive any more since they cannot charge exorbitantly (compared to the transactional value).