Mr. President: Let Us Put OUR Money Where YOUR Mouth Is: Post Office Banks

Or: ‘A Breakthrough for Post Office Banking Courtesy of the USPS Inspector General, We Hope’

(h/t to Juliania via Naked Capitalism via David Dayen)  Potential action items are at the end of the post.

Writing for the New Republic, Dayen has sifted through the IG’s new white paper that applauds the possibilities of a new postal banking system for us, and you can read the 33-page report here (pdf).

How?  By allowing the USPS to engage again in banking by offering savings accounts, debit cards, and even small loans.  The Inspector General teamed up with experts on international postal banking, and liked what he learned.  Many nations around the world offer postal baking, of course.

To begin with, the group discovered that over 68,000 USians have either no access, or only limited access to traditional financial services (2011 pie chart here).  Many of them are poor, and dependent on usurious pay day loan and check-cashing outlets, and were gouged to the tune of $89 billion in fees and interest in 2012.  At a 90% discount for the same services, it could save the average banking-underserved family $2000 a year, and reap the USPS $8.9 billion in profit a year, helping out its balance sheet.

‘The report suggests three types of potential products. First, it proposes a “Postal Card” that could make in-store purchases, access cash at ATMs, pay bills online, or transfer money internationally. Customers with paper checks could cash them at the post office or deposit them through their cell phones, loading them onto their Postal Card. Second, the USPS could offer an interest-bearing savings account, again through the Postal Card, encouraging savings from communities with little in the way of a personal safety net. Finally, the Postal Service could offer small-dollar loans, effectively an alternative to costly payday lending. The fees on all these services would be drastically lower than anything in the marketplace today.

The postal service, with public trust earned over generations and 35,000 outlets in the best real estate in practically every city in America (in fact, the report notes, 59 percent of all post offices are in “bank deserts” with only one bank branch or less), is well-positioned to deliver simple financial services. In fact, it did for over 50 years. Begun in 1911, the Postal Savings System allowed Americans to deposit cash with certain branch post offices, at 2 percent interest. By 1947, the system held deposits for over four million customers. Though dismantled in 1967 (after banks offered higher interest rates and eroded its market share), the post office continues to issue domestic and international money orders, including $22.4 billion worth in 2011, as well as prepaid debit cards through a deal with American Express.’

But indeed, the IG makes the case that there’s enough precedent that since the PO already provides money orders, etc., that the Postal Accountability and Enhancement Act, which restricted new ‘non-postal’ services wouldn’t apply.  Dayen also cites the Chevron administrative deference SCOTUS ruling as allowing a rather wide interpretation.

Dayen notes that in his recent SOTU, el Presidente made much of his plans to issue executive orders (bypassing Congress) in aid of reducing inequality and job creation, and that sort of ‘campaigning for Dems for the midterms’ stuff.  Given that bold an defiant rhetoric (ha), and the fact that the IG recommended postal banking as sincerely helpful for the US in several different directions, he notes that issuing orders for postal banking to commence would be a hummmdinger of a way to start (okay, that’s my verbiage, not DD’s).

But: Obomba could help preserve and *increase* postal jobs, save billions of dollars for the poor and well, any of us, and create those ‘ladders of opportunity’ he claims to love.

Yes, the American Banking Association and others will deride the idea, but if you think of it, postal banking services by and large wouldn’t compete with banking, since…traditional banking isn’t even available to so many folks.  We could make a case that getting the money stuffed in mattresses out into circulation might even help the economy, as might being able to borrow against half of one’s SS security or other income.  But even that isn’t the point, is it?  It’s the citizens -as-consumers trope, which idea is rather hideously capitalistic.

Why the IG’s White Paper is Important Right Now:

You probably are all familiar with the 2012 shock doctrine austerity moves to privatize the Post Office, close boatloads of branches, and sell off many wonderful ones built and lovingly decorated as New Deal WPA/Art projects.  (Jim Harrison shares his photos of them here) Since 2000, over half a million career postal employees have been laid off, and many delivery services have been contracted out to UPS and Fedex.  Then in January 2013, further hell was rained down upon the Post Office, when among other events, a major report Restructuring the U.S. Postal System: The Case for a Hybrid Public-Private Postal System’ was published, and its neoliberal push was being galloped toward the finish line.

Sure and it’s a workable plan to keep making the USPS pre-fund seventy-five years of worker health care costs mandated in 2006, and create conditions in which $4 of the $5 of USPS ‘insolvency’ from its tough to get out from under.  Or to force closures and limit hours and deliveries that cause customer dissatisfaction and inefficiency, while claiming that ‘no one uses the postal services since the advent of email’ bullshit.

And lest we forget: The post office is Ours, as in: The Commons, with the second largest workforce in the US, second only to…er…Walmart.  Yes, over half of the postal workers are (sinfully) union members, while the private entities UPS and Fedex are not, and those are the companies to whom many of the traditional PO services are being increasingly contracted.

Privatization schemes?  Consider that in 2011, an exclusive contract to sell postal facilities was given to CBRE and DiFi’s clever uber-capitalist hubbie, Richard Blum.   Yes, she was only elected to the Senate in 2012, but we know that money walks and talks, eh?  Last week the Postal Service released the official lists of post office closings and suspensions in FY 2013. The Postmaster General, Patrick Donahoe, seems only too willing to dismantle the post office; baffling, isn’t it?

Different folks have been advocating for post offices to act as public banks for some time now, including one or two of the postal workers unions, but also the head of the Public Banking Institute, Ellen Brown, so how very cool that the IG’s report was issued just ahead of two different attempts to bills to ‘modernize’ the post office, one good, one a wolf in sheep’s clothing.

Before I get to them, allow me to introduce Brown’s newest piece on the idea.  She is advocating for using postal banking to fund an infrastructure bank that would cost the government: nothing!  Here she is on that idea, and contrasting the two bills:

The Carper-Coburn bill (S. 1486) is the subject of congressional hearings this week. It threatens to make the situation worse, by eliminating Saturday mail service and door-to-door delivery and laying off more than 100,000 workers over several years.

The Postal Service Modernization Bills brought by Peter DeFazio and Bernie Sanders, on the other hand, would allow the post office to recapitalize itself by diversifying its range of services to meet unmet public needs.

Needs that the post office might diversify into include (1) funding the rebuilding of our crumbling national infrastructure; (2) servicing the massive market of the “unbanked” and “underbanked” who lack access to basic banking services; and (3) providing a safe place to save our money, in the face of Wall Street’s new “bail in” policies for confiscating depositor funds. All these needs could be met at a stroke by some simple legislation authorizing the post office to revive the banking services it efficiently performed in the past.’

In fairness, the Senate legislation proposed by Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.), changes the agency’s payments toward retirement benefits (40 years amortized), but  allows for a phasing out of both Saturday and to-the-door mail delivery if those moves are necessary to make ends meet.  It has other creepy features as well; the proprietor of the great website parses it.

The Sanders/DeFazio bill would rescind the 2006 Bush era pre-funding law.  Whew.

The National Association of Letter Carriers (NALC) is urging our support for the Sanders/Defazio bill, as well as H.R. 961, a measure that calls for a refund of the USPS’ surplus in FERS (Fact sheet), as well as H. R. 30 (Fact sheet) , “expressing the sense of the House of Representatives that the United States Postal Service should take all appropriate measures to ensure the continuation of its 6-day mail delivery service.”

So.  May I urge you to make some noise about all this?  It’s hard not to think it’s almost too late, but we need to contact everyone we can, and not just take this shite.  The Senate Committee on Oversight and Homeland Security began to debate the Carper bill yesterday, but something stalled it after three hour, according to the APWU .  They recommend that we contact the members of the committee listed toward the end of the piece, and of course, all our Critters.  I’d add the White House to the list, especially about an executive order to create postal banks…for the good of the poor, and all of us.

But please:  Don’t let them kill the Post Office!  And Canuckistans: Beware of this coming to a theater near you.

(cross-posted at

16 responses to “Mr. President: Let Us Put OUR Money Where YOUR Mouth Is: Post Office Banks

  1. NOW, This is the American way to “take our country back” !

  2. oh, wouldn’t it be lovely were it to get traction? oh, i wish they ever left-paged or front-paged my posts at fdl any more. sure would like to get all this spread widely!

  3. Yes, indeed to the importance of this, and again thank you so much, wendye, for giving this your extended coverage – really well presented and timely.

    I was thinking this morning that the neoliberal formulation we have been pushing against, of “too big to fail” has been simply the rightwing formulation of drowning the government in the bathtub turned inside out, like a dirty sock. And “too big to fail” is correct except for the punctuation – should be “too big, to fail” or better “too big (to fail)”. And if anything is going to be big, I would far rather it be a government entity like the Post Office than a corporation. Big, not too big.

    For the little people.

  4. welcome, ww, and again: thank you for the heads-up, or i may have missed it altogether. and even in that first diary of mine i linked to, the germ of the idea was there, by way of the postal workers unions. and ellen? i’ve forgotten already…

    darn, i’m just not quite getting the punctuation changes to tbtf, but if you’re heading toward ‘too big, should fail’, i’m with you. i only scanned one piece at NC, the one on private equity dodging taxes; what a stacked deck! neo-feudalism, inverted totalitarianism, any or all of that. i think you will all like this piece from BAR.

  5. thanks for the links, bruce. i like eskow’s better, given that the idea never DID come from liz warren (as per buzzflash), just through her. after i posted this at fdl, i did finally notice ds wright had covered it minimally, and he put all the juice her way too. thus the many comments became about *her*, not so much the pragmatic idea itself. but then, iir my scan of the latter link, saving the PO wasn’t mentioned. maybe that could be tactical in some venues, but to me it’s a triple header of a game if played to win…and won.

    dunno if it quite fits, but i think of this song when i think of the many who are drowning in debt, many not by their own design…

  6. Absolutely brilliant thought, words, music and depiction, epitomizing the trap of “trickle-down”: no wonder, I never heard it on the “Top 40”!

  7. there used to be a version online without the long lead-in; i couldn’t find it.

    just heard from the geek that was supposed to be trying to get data off y dead hard disc. he says nope. i am so depressed i can scarcely think. my entire writing oeuvre and thousands of my bird and critter photos were on there. oh, i wish i hadn’t been so cheap not to have gotten a new laptop earlier…

    i’ll get it back from him and see if i can send it…somewhere…for retrieval.

  8. Try NSA:
    I just spent 24 hours beating back a malware “firewall” freeze-out like the above, but also wouldn’t put it beyond ISPs; as a prelude to the circuit courts’ endorsement of telecom censorship, against FCC, US and net neutrality!

  9. heh; i’ just seen chris weatherhead on someone’s twitter stream speaking of the huge difference, and the moral degeneracy of his prosecution and sentence. might have been emptywheel’s who’s joined ‘first look’.

    wish i knew what you meant by ‘beating back a malware firewall freeezeout’. i just ran malwarebytes and can’t figure out how to select all of the weirdos. :)

  10. It Calls Itself ‘Windows’ Safety Master (or Advanced Security Center), masquerading a your PC’s anti-hacking “firewall”; don’t open and Don’t Buy IT; scrub it (or have it scrubbed), instead!

  11. never heard of it. my DiL showed me how to get security essentials, and it comes with a lovely photo fix program. that, malwarebytes, and super antispyware *seem* to have done the trick lately. kgb suggested ghostery, too, for keeping adware at bay.

    do you by chance know any tricks that might help me download videos again onto my realplayer? (now realcloud player, iirc). i’ve followed all their fixes, enabling this, that, and t’other, to no avail.

  12. Unfortunately, no; since you’re clouds above me:

  13. “Too big, to fail” = “Too big, WILL fail”, wendye – that’s what I got from that Real News Network series, and it heartened me muchly since all our feeble efforts to turn the tide just need an assist from destiny or fate or history or whatever.

    Like you, I shy away from the Warren connection mostly because we have learned that words, words, words are often a ploy to distract and placate and we are sick of placations! When she does something, I will cheer. A female Obama we don’t need, and I think she might be more likely than Hillary who is way, way too old.

    I’m very sorry for your computer trove in limbo – I’ve lost photos in the past due to handmedown computer collapses but nothing on the order of your beautiful work. I wish I could email you my nephew who helps my sister and rebuilds computers – or you could take a trip south (business expense – write it off.)

  14. okay, now i understand ya: ‘too big will fail’. well, shoot, the Big Bks did fail, but were bailed out to the tune of $13 trillion, and now the fed’s funny money still inflates wall street. but yes, something’s gotta give, an that leverage should be…us? eye god, as augustus mccrae would say, guess its time to put this up again. i went with the full version…

    oh, and thank you for the concern about my data loss; it’s taking me time to get use to the fact it may all be gone. all that research, not all the photos (some i did back up on discs and a thumbdrive or two). need to do a meditation video or two. i asked the geek to give it back,i may find someplace to send it to, just in case. :)

care to comment? (no registration required)

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s