The Postal Service (USPS) could spare the most economically vulnerable Americans from dealing with predatory financial companies under a proposal endorsed over the weekend by Sen. Elizabeth Warren (D-MA).
“USPS could partner with banks to make a critical difference for millions of Americans who don’t have basic banking services because there are almost no banks or bank branches in their neighborhoods,” Warren wrote in a Huffington Post op-ed on Saturday. The op-ed picked up on a report from the USPS’s Inspector General that proposed using the agency’s extensive physical infrastructure to extend basics like debit cards and small-dollar loans to the same communities that the banking industry has generally ignored. The report found that 68 million Americans don’t have bank accounts and spent $89 billion in 2012 on interest and fees for the kinds of basic financial services that USPS could begin offering. The average un-banked household spent more than $2,400, or about 10 percent of its income, just to access its own money through things like check cashing and payday lending stores. USPS would generate savings for those families and revenue for itself by stepping in to replace those non-bank financial services companies.
Those companies are among the most predatory actors in the money business. Payday loans with annual interest rates well north of 100 percent suck paying $520 to borrow $375. After decades of operating in a regulatory blind spot and ducking state-level reforms, the payday lending business now faces a crackdown from the Consumer Financial Protection Bureau. The threat of new rules for short-term cash loans in general has caused traditional banks to stop offering deposit-advance loans with similar features.
Read more at ThinkProgress Link via Moyers and Company
2 thoughts on “Sen. Elizabeth Warren Proposes Replacing Payday Lenders With the Post Office”
I can hear the banks screaming already. This would cost someone a lot of money.
Elizabeth Warren was appointed in late 2009 by a bipartisan Congressional Oversight Committee to oversee the Wall Street bank bailouts. She did a phenomenal job, looking out first and foremost for the interests of the American taxpayers. She was later nominated by President Obama to head the Consumer Financial Protection Agency, a nomination and an agency which Republicans opposed under pressure from the same Wall Street banks whose bailouts they have endlessly railed against as one of their main political strategies.