Saving the Post Office: Letter Carriers Consider Bringing Back Banking Services

[xchrom]

http://truth-out.org/news/item/10812-saving-the-post-office-letter-carriers-consider-bringing-back-banking-services

On July 27, 2012, the National Association of Letter Carriers adopted a resolution at their national convention in Minneapolis to investigate the establishment of a postal banking system. The resolution noted that expanding postal services and developing new sources of revenue are important components of any effort to save the public post office and preserve living-wage jobs; that many countries have a long and successful history of postal banking, including Germany, France, Italy, Japan and the United States itself; and that postal banks could serve the nine million people who don't have a bank account and the 21 million who use usurious check cashers, giving low-income people access to a safe banking system. "A USPS [United States Postal Service] bank would offer a 'public option' for banking," concluded the resolution, "providing basic checking and savings - and no complex financial wheeling and dealing."

What is bankrupting the USPS is not that it is inefficient. It has been self-funded throughout its history. But in 2006, Congress required it to prefund postal retiree health benefits for 75 years into the future, an onerous burden no other public or private company is required to carry. The USPS has evidently been targeted by a plutocratic Congress bent on destroying the most powerful unions and privatizing all public services, including education. Britain's 150-year-old postal service is on the privatization chopping block for the same reason, and its postal workers have also vowed to fight. Adding banking services is an internationally tested and proven way to maintain post office solvency and profitability.

Serving an Underserved Market Without Going Broke

Many countries operate postal savings systems through their post offices, providing depositors without access to banks a safe, convenient way to save. Great Britain first offered this arrangement in 1861. It was wildly popular, attracting over 600,000 accounts and £8.2 million in deposits in its first five years. By 1927, there were twelve million accounts - one in four Britons -with £283 million on deposit.

[no_hypocrisy]

1. That's a great idea.

[Buns_of_Fire]

4. And that's why Congress will never go for it.

It might deprive their BanksterBuddies of a few grand here and there.

[BumRushDaShow]

2. They already issue Postal Money Orders

so why not?

[Glitterati]

6. Which is how I pay my bills

every month. The postal service is a life saver already for us folks on Social Security who don't want to pay outrageous bank fees just to pay our monthly bills.

A postal money order is as good as a certified check without the fees to get one, and the recipient can walk into any post office and cash it without fees.

[dixiegrrrrl]

17. what do they charge for each Money order?

Someting I have thought of doing, not sure how much it would cost per money order.

[BumRushDaShow]

21. Here's their pricing structure (depends on amount)

https://www.usps.com/shop/money-orders.htm

[goclark]

3. Thanks for your post

We love our postman ~ he is the best!

However, our mail is 95% coupons for Grocery stores.

What can we do?


"The USPS has evidently been targeted by a plutocratic Congress bent on destroying the most powerful unions and privatizing all public services, including education."

[On the Road]

5. It Would Certainly be a Public Service

and may be a good corrective for private banks. There is a whole class of people in this country with no checking account who as a result have no savings and are unable to perform a lot of basic functions in this economy.

The issue with postal bankin may be profitability. If banks have difficulty avoiding losses on small residential accounts, the post office may have a harder time, especially with higher wages and what are likely to be smaller accounts. Certainly nothing wrong with finding out if it works.

[BumRushDaShow]

7. The government should not be about profit-making

The issue would be to reach break-even while providing a reliable and highly accessible service.

The insistence on the model of bankruptcy-encouraging usurious interest rates and fees by private banks is part of what helps precipitate some of those losses due to a customer's inability to pay... which then triggers their knee-jerk "maximum profit no matter what" solution, leaving them no choice but to raise those fees even higher on those remaining after the weakest customers are forced to drop out.

When the interest rate for a bank to borrow is near 0% yet the interest rate for a consumer to borrow from that same bank is upwards of 25% or higher, then it is obvious that this sort of outrageous business practice is not something for the government to emulate.

The problem with rethugs is their insistence to apply a business model to every frickkin' thing they get their hands on including the federal government.

[magical thyme]

8. banks can't make money on small accounts because of the huge salaries and expenses

at the top, plus only banking is there to pay for the infrastructure.

My credit union has no problem with tiny residential accounts. They have a $5.00 minimum savings account balance. My account sat with a $5.00+ savings account (the plus being a couple pennies/year in interest) for several years. No change to my account status. Their physical infrastructure is limited primarily to a couple states, but their shared infrastructure makes them available to the entire country and any place else where there are credit unions in the program (forget the name of the program, but I can do my CU business, such as check deposits and cashing, at *other* CUs in my state).

The P.O. physical infrastructure is in place, paid for by its normal business activities. The only infrastructure it would need to add is additional computing capacity -- a fraction of the expense that a physical infrastructure would entail.

[dixiegrrrrl]

18. Interestingly, my CU is much more expenseive than my local community bank.

Fees, balance demands, check costs, all high at the CU, the only CU I can join
while local bank has no fees for "senior" accounts, checks are 5.00 per box.
Wonder if a PO account would beat that. Hmmmm.

[magical thyme]

24. its too bad you don't have a better CU available

my local bank is acting more and more like a big bank. I had a free checking account for the last 9 years, but got a letter from them a few weeks ago changing my account to require a $500 minimum balance or have a monthly charge of $8. Their checks cost the same as at my CU, but their fees are higher and their interest payments on savings are lower.

They also pulled a nasty trick on my a couple years ago and stuck with with a $30 charge.

On the other hand, I had my CU checkbook stolen a couple months ago. My CU waived the fee to stop payment on the checks because I've been with them for almost 30 years.

[On the Road]

35. Well, Compensation for the Top 6 at Bank of America Last Year was $55M

on revenues of $115,074M and net income of $1,446M. Other expenses were $93,629M. That's why very large companies don't mind paying high executive salaries -- because good CEOs can benefit their companies much more than they collect in compensation.

http://insiders.morningstar.com/trading/executive-compensation.action?t=BAC®ion=USA&culture=en_US
http://finance.yahoo.com/q/is?s=BAC+Income+Statement&annual

The concern is that since banks feel that small accounts cause them to lose money, introducing them at the Post Office might make the financial situation worse than better. Postal workers make substantially more than bank tellers, and adding banking to postal services requires more employee knowledge and more hours at the counter. The benefits are that the physical infrastructure is already there and there is a steady stream of existing customers.

It's definitely worth pursuing. Apparently the UK has made it work, and their postal office and banking industry are doing OK. It's just not clear that's it's a no-lose proposition.

[magical thyme]

36. I suspect that BOA has more than 6 highly paid executives

so implying that $55M is the all or even the bulk of BOA's executive compensation seems a red herring.

Not everything is win-win. But if the winners are mostly the 99% and the losers are the 1%, well too effing bad for them.

[On the Road]

37. It is a Matter of Proportion

The top one or two executives typically make much more than other executives by an order of magnitude. The Top 6 listed are what Bank of America publicly discloses. It is demonstrates that for a large bank like BoA, executive salaries are not a significant part of total costs.

[KurtNYC]

9. how about repealing the 2006 legislation?

Let the post office be the post office. being a bank too isn't going to correct what is wrong and is not part of the post office's core mission.

[on point]

10. Charge first class rates for ALL the advertising trash delivery service they perform

That will help a lot. No one wants the garbage, it just clogs up the systems, wastes money for the country and requires a very heavy, capital intensive transport and process infrastructure.

Ditch it and ditch it now.

get back to delivery of mail and you will find it can carry its own costs.

[CreekDog]

26. Yes! Where do I sign that petition?

i hate the junk mail and that the waste is encouraged bugs me.

[Egalitarian Thug]

11. I really like this idea. K&R

[Iwillnevergiveup]

12. Darrell Issa has had his dirty hands

in this post office kerfuffle. It's all about union busting. This past week in L.A., temperatures have been in the high 90's, and to watch our letter carriers schlepping their big bags, plastic bins and hand trucks with a smile on their faces makes me furious.

[Historic NY]

13. I'd open an account rather have a needed business make some cash...

than the banksters. They always stood up for missing money orders, in several instances for me.

[bucolic_frolic]

14. Wasn't the USPS required to pay for 911 infrastructure?

for scanning, x-raying the mail? Or did Congress eventually
help them with the $3-5 Billion?

[mwooldri]

15. Yes, go for it! Bank at the Post Office!

If this happens, one product that should come to market is a "Premium Bond". Look up the UK version - it's basically your savings in a zero interest account... but interest does accrue, and the collective interest is put in a pot and then there's a drawing to see which bond holders get the interest. Gambling without losing the money, with repeat entries every month!

[JCMach1]

16. have the Post Office roll out mPesa for America

With a mobile phone you would never need cash agajn.

[bunnies]

19. I dont get it.

Why would someone *not* have access to a bank? And if they dont have a bank account already, why would they want or get a post office bank account? What am I missing?

[Recursion]

20. Because they live east of the river in DC, for instance

No banks, but there are some post offices.

[RB TexLa]

22. A quick google map search says otherwise. And on bus routes too

[BumRushDaShow]

23. Many banks left urban communities

so folks have had to rely on store-front check-cashing places and more recently, storefront "Payday Loan" places, both of which charge exorbitant fees. After the Savings & Loan debacle, many of the small banks never returned and with deregulation, those that were left were bought by bigger commercial banks and then were promptly closed as being "duplicative".

[bunnies]

30. guess its not hard to guess I dont live in one.

I get it now. Thanks!

[justice1]

25. The president of the lone bank in town is unethical...so I drive 20 miles rt to a credit union.

However, there is a post office across the street from me.

[bunnies]

31. Makes sense.

Id forgotten what its like to live in a small town.

[JackRiddler]

28. There are millions of people without bank accounts...

Living on cash payments or paycheck to paycheck cashed at check-cashing emporiums.

[Rosa Luxemburg]

27. Should be nationalized and be part of the fed system. It can do banking, passports, vehicle licenses

Post office should do immigration stuff, visas, work permits etc

[robinlynne]

29. They will need to hire more people. They are completely understaffed already. I say close congress.

We can't privatize Congress. the SUpreme COurt already did that.

[Kingofalldems]

32. Great idea from my union

Also would put those slimy check cashing exploiters out of business.

[Glitterati]

34. And that's why it will never happen

One of those slimy check chasing exploiters is WalMart.

[myrna minx]

33. I adore my letter carriers. This is such an excellent idea.