Postal Banking

Originally posted by sh76
I don't see how it redistributes money. If people would open free checking accounts, all of these services would be free. the post office would presumably charge for cashing checks (though perhaps less than private check cashing businesses do). A withdrawal at a bank, on the other hand, is free and most banks have at least one free ATM in the area and many even ...[text shortened]... a young adult for a free checking account with no minimum balance. But now, they're everywhere.

There is a cost in opening/ maintaining/ protecting/ servicing a bank account. Banks can offset that cost, if there s sufficient money in the account, by lending the money at a higher cost. But if the goal to attract very small balances then someone else will pay for the new accounts. Thus, I it seems apparent that the free checking account would be like Obama's "free" health care where those with means foot the bill for everyone.

Originally posted by sh76
I don't understand why people don't have bank accounts these days. There are many fee-free checking accounts (e.g., https://home.capitalone360.com/online-checking-account) with no minimum balance and everything can be done online except, I suppose, for depositing cash.

It would probably be better in the long run to educate people to open checking accounts th ...[text shortened]... ahead. But if it means subsidization from the federal government, I don't really see the point.

I'm sure it's very hard for someone living in the suburbs with an upper middle class lifestyle to understand why some people don't have bank accounts. But if you had bothered to check some of the links I provided, you'd have seen that there has been a wave of bank branch closings in recent years that have left certain areas with a severe shortages of banks (one link said there is one bank branch per 20,000 people in the Bronx). This is the same type of "consolidation" that you are proposing for the Post Office, which would mean even less service for a lot of lower income areas.

I don't see how it would require any "subsidization"; just permission from Congress to offer the financial services at the PO. "The point" is to make life a little easier and less costly to lower income people; a goal that obviously isn't very important to most commentators here but which Bernie thinks is a worthy one.

EDIT: In California, the unbanked population is exceptionally large. Sixty percent of low-income neighborhoods do not have a bank or credit union; tellingly, the state has twice as many check cashers and payday lenders as the rest of the country. Payday lenders charge 400 percent on loan interest rates, and check-cashing fees cost a family up to $2,000 a year. In total, the Center for Responsible Lending estimates that California families pay $450 million in payday loan fees each year.

http://ssir.org/articles/entry/banking_on_low_income_families

Originally posted by quackquack
There is a cost in opening/ maintaining/ protecting/ servicing a bank account. .

No there isn't. Not for many years.
You obviously don't have any money to put in a bank account, do you?
Do you live off the grid or something?

Originally posted by no1marauder
Another modestly brilliant idea from Bernie Sanders:

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-lik ...[text shortened]... ck cashing services are presently extorting from mostly lower income individuals).

A win-win.

Interesting plan, but I don't see this getting off the ground again in the USA. Banks would be unwilling to give up even a small percentage of business to anyone else. It may be win-win for post office and consumers, but it won't be a "win" for the banks.

Originally posted by bill718
Interesting plan, but I don't see this getting off the ground again in the USA. Banks would be unwilling to give up even a small percentage of business to anyone else. It may be win-win for post office and consumers, but it won't be a "win" for the banks.

The whole point of a Bernie Presidency would be that the banks and other institutions which favor the economic elite wouldn't have a veto over public policy which would be advantageous to the People.

Banks hardly care about lower income people anyway; there's just not enough profit to be made there. Sure they'd reflexively oppose the plan anyway, but who cares?

Originally posted by sh76
I don't understand why people don't have bank accounts these days. There are many fee-free checking accounts (e.g., https://home.capitalone360.com/online-checking-account) with no minimum balance and everything can be done online except, I suppose, for depositing cash.

It would probably be better in the long run to educate people to open checking accounts th ...[text shortened]... ahead. But if it means subsidization from the federal government, I don't really see the point.

In today's economy most people just live from welfare check to welfare check. Why then would they need the banks or post office?

Originally posted by no1marauder
I'm sure it's very hard for someone living in the suburbs with an upper middle class lifestyle to understand why some people don't have bank accounts. But if you had bothered to check some of the links I provided, you'd have seen that there has been a wave of bank branch closings in recent years that have left certain areas with a severe shortages of ban ...[text shortened]... in payday loan fees each year.

http://ssir.org/articles/entry/banking_on_low_income_families

I saw the link. Online banks are available anywhere regardless of whether there's a branch within 100 miles of your home. That was my point (which I thought I made pretty clear...) I have bank accounts all over the place for myself, my wife my kids, etc, and I don't pay a dime in monthly fees and I do virtually all my banking online. While I understand that some people don't want to bother with online banking, I don't think we need to subsidize that.

Originally posted by quackquack
There is a cost in opening/ maintaining/ protecting/ servicing a bank account. Banks can offset that cost, if there s sufficient money in the account, by lending the money at a higher cost. But if the goal to attract very small balances then someone else will pay for the new accounts. Thus, I it seems apparent that the free checking account would be like Obama's "free" health care where those with means foot the bill for everyone.

The main costs are in setting up the bank itself. The marginal cost to service each new account is probably tiny. With sufficient volume of small accounts, I'm sure banks could do fine.

Originally posted by sh76
I saw the link. Online banks are available anywhere regardless of whether there's a branch within 100 miles of your home. That was my point (which I thought I made pretty clear...) I have bank accounts all over the place for myself, my wife my kids, etc, and I don't pay a dime in monthly fees and I do virtually all my banking online. While I understand that some people don't want to bother with online banking, I don't think we need to subsidize that.

A) Not everyone has internet access;

B) where's the "subsidization" part again? The proposal is merely to allow the Post Office to do various types of banking.

EDIT: As of late 2012, 20% of American households did not have internet access and only 57% of households with income under $15,000 did.http://www.huffingtonpost.com/2012/10/31/internet-access-american-households_n_2049123.html

Originally posted by sh76
I saw the link. Online banks are available anywhere regardless of whether there's a branch within 100 miles of your home. That was my point (which I thought I made pretty clear...) I have bank accounts all over the place for myself, my wife my kids, etc, and I don't pay a dime in monthly fees and I do virtually all my banking online. While I understand that some people don't want to bother with online banking, I don't think we need to subsidize that.

You are not playing the game right sh

If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it. 😛

Originally posted by whodey
You are not playing the game right sh

If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it. 😛

There seems to be a lot of hostility to any idea that makes the lives of the poor a little more bearable. Again, there is no subsidy involved but the facts have never gotten in the way of your idiotic statements so why start now?

Originally posted by sh76
The main costs are in setting up the bank itself. The marginal cost to service each new account is probably tiny. With sufficient volume of small accounts, I'm sure banks could do fine.

I don't agree. Banks simply make no money on accounts with little or no balance. It's the same $6 a year postage to mail out statements for large and small accounts. You have to pay for tellers, rent, help desks, you have deposit slips etc. Adding a new set of customers with a marginal loss on each transaction simply isn't profitable --- unless of course someone else is forced to subsidize it.

Originally posted by quackquack
I don't agree. Banks simply make no money on accounts with little or no balance. It's the same $6 a year postage to mail out statements for large and small accounts. You have to pay for tellers, rent, help desks, you have deposit slips etc. Adding a new set of customers with a marginal loss on each transaction simply isn't profitable --- unless of course someone else is forced to subsidize it.

Those are all reasons why banks don't care about small accounts (though you ignore the many fees they can and do charge such customers) but not particularly compelling when you're discussing the Postal Service. They have sufficient facilities and personnel to handle such accounts and could turn a profit on such services with reasonable fees (and they wouldn't have to pay $6 a year to mail out statements).

Originally posted by quackquack
I think you see the point. It's a pretext to redistribute money.

Not everything is a grand conspiracy to stop you from licking the boots of the wealthy.

One could easily make such a service cost-neutral by charging a few dollars a year for having the account, which would be a significantly better deal than what many Americans apparently now get.

Originally posted by no1marauder
And given the Postal Service's well known financial woes due to less "snail mail" it would also be a way for the UPS to generate a modest amount of extra revenue (at rates far less then what payday lenders and check cashing services are presently extorting from mostly lower income individuals).

A win-win.

All those people that think this is a good idea can start cashing cheques for poor folk.

You could do it for free No1, or for a fee that easily undercuts the extortionate rates of the commercial services.