Post office going to open branches next to liquor stores and stay open all night?

Didn't think so.

Pay day and title lenders are evil, and thriving because people are stupid.

ANYBODY can find a credit union to join. IDK why there is one branch bank left in America? They are ALL a rip off. And pay day lenders are for people too stoopid to patronize a branch bank.

I keep $1 in my CU savings acct and around a grand in the checking. I get free ATM many places, though I usually just get cash back when making a small purchase at Walmart or the grocery store, free checking, free CC, lower interest car loans than any industry promotions, and cheap mortgages. My CU is three states away. I haven't set foot in a branch for years.

 

I admit I never considered the plight of the poor in dealing with banks until the last few years. My farm checking account number is likely older than I am. But what about the folks that weren't born to a bank account?

I first saw check cashing stores when I moved to Kansas City forty years ago. They take a chunk of a working man's pay check, because his credit is so bad the banks won't serve him.

Forty years ago the local mafia ran the payday lending operations. Gradual removal of usury laws then allowed lenders into the racket, who didn't break bones if not paid, but who actually charge higher interest than Guido did.

An astounding 68 million adults don't have a bank account of any kind,,,in the wealthiest nation on the earth.

I believe better bank regulation is the way to curb the evils of legal loan sharking and check cashing centers and the title lenders. It's not the Post Office could not, it's more that they should not squander their existing good reputation on making small loans.

Already a poor person can take cash to the post office and buy the best money orders on the market. Having prepaid debit cards is already being tried.

But first, we need to get the postal service back on a pay as they go basis. The inflation adjusted price of stamps is probably too low. We should not cut service, but rather gradually make the users of the post office pay the full bill.

Those banks all had their hands stretched out 8 years ago, and they weren't dissapointed. Now that they are profitable again it wouldn't be so much to ask them to revise procedures to accommodate the poor folks and keep them away from the sharks, as much as practical.

The postal savings plan was just that, never a lending plan.

 

So what you're saying is that we should all go into the payday lending business because the profits are so high we'd get rich in no time? I sincerely doubt it. The interest rates are high because the risk is high. That's Capitalism. Adam Smith's invisible hand has adjusted the price to the correct level.

If the U.S. Government gets into the business it'll be a nightmare, as most government programs are. It will lose money. And as with student loans there will be calls for the debts to be "forgiven".

Charity should come from churches. Government should stick to the responsibilities outlined in the Constitution.

 

Actually, I'm saying the US government should steer clear of the payday loan business.

My friend Baldeswitcher owns and operates a pawn shop. For people with goods and need for small loans, I've seen him make loans for as little as $50 to $100. If Blade makes a good credit decision, he gets a healthy return on his loan and the person gets their gadget back. If there's a default the pledged property goes up for sale in the shop. I have no qualms with pawn shops. They never sue anybody or ruin their credit. Yet, a pawn shop doesn't serve any temporary credit and banking needs of the people who have nothing to hock. Today those borrowers are fed to the legal loan sharks.

But the fact that one out of four households has no bank account of any kind is appalling to me. We can do better than that, surely. Yet instead of opening up a bank in the post office, we could easily bring back a modern postal savings plan where prepaid debit cards were offered,,,and in fact the Post Office is doing that today as a pilot project with American Express.

But the government should not be in the unsavory payday loan business. We have lots of real banks that could, and would, enter that market if properly incentivized. Locally owned banks have made small "community service" loans up to $500 for at least 30 years I am aware of. We could by proper regulation induce those big banks to do the same, and at a small profit.

Those that actually care about the poor, rather than vilifying them for their poverty, seem an endangered species today. We should never have our federal government be in the business of milking out the widow's last penny for interest on small loans that were made so she can pay her rent.

That's what responsible, regulated banks should do instead.

 

Well, Super we've got the "Community Reinvestment Act". That law "incentivized" banks to make loans to people who ordinarily wouldn't qualify. The result was the economic meltdown of 2008.

Everything the government does just makes things worse. Do you really think this time will be different?

 

Well, Super we've got the "Community Reinvestment Act". That law "incentivized" banks to make loans to people who ordinarily wouldn't qualify. The result was the economic meltdown of 2008.

Everything the government does just makes things worse. Do you really think this time will be different?

Amen.....maybe if one is high risk, they SHOULD pay a high risk premium.

 

The Community Reinvestment Act was a window dressing, half assed attempt to require commercial banks to not "redline" certain areas. Surprisingly, the handful of CRA loans actually did better than all those trillions of dollars of subprime loans that commercial banks made with both hands to anybody with a pulse who asked for them,,,because the scam was the banks could peddle them to Freddie and Fannie and gullible millionaires who could afford to gamble on derivatives. When the bubble popped we had to bail the banks out of the mess of their own creation,,,or perish with them. The CRA loans played no significant role in the fall 2008 banking crisis. Only 6% of high interest (subprime) loans could even conceivably be linked to the CRA during the financial crisis.

http://www.federalreserve.gov/econresda ... 50526.html

But as Mark Twain said, the lie can travel a mile before the truth can get it's pants on. The CRA loans are used as an excuse by the bankers to hide their own greed and folly, and there's just no use in trying to educate the general public about the truth. The public much prefers the lie that blamed a financial panic involving trillions of dollars of subprime debt on a miniscule amount of CRA loans and Jimmy Carter. There's no fighting the belief.

But the bankers themselves know better.

The bank charters that grant the privilege to commercial banks to carry on the banking business have been heavily regulated even before the Great Depression.

It is commendable the banks have served 75% of the households. It's not unreasonable to draft new regulations to spur them to serve as much of the remaining 25% that aren't served, but reasonably could be.

But no, we can't allow banks to rape and pillage the poor like the payday lenders do.

Yet it's possible to get small unsecured loans and small accounts to more people than banks service today.

I'm just saying the Post Office needs to not make loans. That's a well regulated banking system's task and they would be far better at it.

Yet the existing sales of money orders by the Post Office is a wonderful success--used by almost everyone, and a system where federal and state checks (and possibly private employer's paychecks that qualified at the local post office branch) could be transferred to a post office debit card issued through a local bank to the holder of of postal address or account might be a useful and practical program,,,and something more akin to the old postal savings program.

I'm too conservative to want the federal government to get into the small loan business directly.

A good government serves the people. Helping poor people to cash checks and pay bills, and hopefully save for emergencies, is a desirable public policy, worthy of the post office helping if it can be self financed through fees.

The fact 1/4 of the households have no banking accounts is something we should all be ashamed of and resolved to improve.

 

35 years ago I was a starving college student. No scholarship, no loans, no grants, no family money/allowance. Just $325/semester in-state tuition (no doubt subsidized by the taxpayer.)

I worked graveyard at a convenience store, minimum wage, $4.25/hr IIRC. Yet I had a savings and checking account with First Interstate Bank of AZ. When I joined the Navy after graduation, I put everything in Navy Federal Credit Union. I've had several credit union accounts over the years, and never set foot in another branch bank.

I walk through lots of crummy neighborhoods. I see branch banks. Occasionally I see CUs.

I don't see why "the poor" can't get an account, other than they can be bothered with saving.

 

I don't see why "the poor" can't get an account, other than they can be bothered with saving.

"Bothered" with saving? There is no saving when you live paycheck to paycheck. What's the point of depositing your paycheck when you will just have to withdraw the entire amount before you get the next one? Let's see . . . do I fill my gas tank and buy enough food to last until the end of the week which means I will have to buy loose tobacco and roll my own cigarettes or do I buy gas as I need it, along with packs of cigarettes and ramen noodles to eat between insufficient meals?

I'm just posting an example to help you understand. I haven't needed to roll my own cigarettes or eat Ramen noodles to stave off hunger in a long time (even though I like the chili flavor ones! ). Nobody "needs" cigarettes for that matter. However, for quite some time, I went without a bank account due to the fact that I used almost every penny I earned in a week to get by. I went to the bank once to cash my paycheck and they told me that they would have to hold my money for a few weeks before I could use any of it because my average monthly balance was too low. I stopped using my account and started cashing my checks at Wal-Mart.

I have recently opened an account to receive direct deposits from my employer.

My point being though is that the poor simply do not have the money to save. They do without one thing or another 98% of the time in order to get by from one week to the next.

 

Forty years ago I moved to Kansas City to attend college, and I was quite put out when the 7-11 at the foot of the hill from the dorm would not cash my check. I took my car over to a local bank and opened a checking and savings account, but even then I had to wait a week or more for my checks to clear. If my roommate hadn't have honored my check I would have had a hard time getting home to Humansville,,,where people didn't speak with a strange accent and my last name cashed my checks anywhere.

As I get older I realize just how privileged I was to have been born in Himamsville. It's a cold, hard, paycheck to paycheck life for folks who don't have anybody behind them to help them through life.

I've also lived to learn just how hated, despised and mistreated the poor working people are. Christ cast the moneylenders from the temple for good reasons.

Yet if we modern people can't cast the moneylenders out of the temple we can at least draft some laws to make the wealthy bankers accommodate the poor better than the already do.

Yet many are so poor they will always need cash to live from check to check , and if the post office can help service them, that's fine with me.

 

Postal Savings is before my time, though I've seen the certificates for them. Somewhat similarly, I suppose, I wish they hadn't discontinued paper US Savings Bonds a few years back. Between the fact they are only digital now, the site to buy them is (or at least was some years back) a complete train-wreck, and the interest rates are so low now, I don't bother. But buying a few savings bonds with each and every paycheck was a ritual I used to do and sort of miss. There was a short lived program in which you could just mail in a form with a check and they'd send back bonds. Living in a remote, rural area, it was handy. But it was gone within a year or so of it's existence. Oh well, there are plenty of other fine investments these days, so I can't complain.