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Kirsten Gillibrand Wants Your Post Office to Offer a Public Option for Banking

Kirsten Gillibrand Wants Your Post Office to Offer a Public Option for Banking

“to take on the problems that the unbanked have all across the country”

Kirsten Gillibrand is likely going to run for president in 2020 and is already trying to channel her inner Bernie Sanders. The New York senator is introducing legislation which would make branches of the post office offer banking services, including short term loans.

Daniel Marans reports at the Huffington Post:

Kirsten Gillibrand Unveils A Public Option For Banking

Sen. Kirsten Gillibrand (D-N.Y.) is introducing legislation Wednesday that would require every U.S. post office to provide basic banking services, an ambitious step aimed at improving the lives of Americans with limited financial resources.

The bill brings to Congress for the first time a policy idea that has already won the support of liberal economists and anti-poverty activists: Turning the nation’s sprawling network of U.S. Postal Service facilities into places where working-class and low-income Americans who lack adequate access to commercial banking can obtain low-cost, short-term loans.

The central goal of the bill is to replace risky financial products like payday loans, which can trap borrowers in prolonged cycles of debt, with regulated alternatives.

“This is a solution to take on payday lenders, to take on the problems that the unbanked have all across the country. It’s a solution whose time has come,” Gillibrand said in an interview with HuffPost.

When I suggested that Gillibrand is channeling Bernie Sanders, it wasn’t an exaggeration. In 2015, Joe Pinsker wrote at The Atlantic:

Bernie Sanders’s Highly Sensible Plan to Turn Post Offices Into Banks

In an interview with Fusion’s Felix Salmon the day after last week’s Democratic debate and published Tuesday, Senator Bernie Sanders discussed the marquee features of democratic socialism he’s been tirelessly calling for during his presidential campaign: higher taxes for the wealthiest Americans, an increased minimum wage, and breaking up the biggest Wall Street banks.

Salmon also raised a possibility that has not been as prominent in Sanders’s stump speeches, but animates him nonetheless: turning the U.S.’s post offices into banks. Sanders:

If you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it.

Can you guess who else loves this idea? Bryce Covert wrote at The Nation in 2016:

Elizabeth Warren’s Fight Against Payday Lenders Comes to the Post Office

Nine years ago, a Harvard law professor dreamed up a new concept: a government agency devoted solely to protecting consumers from unscrupulous financial companies, the way the Consumer Product Safety Commission protects us from faulty microwaves. Today, Elizabeth Warren’s Consumer Financial Protection Bureau (CFPB) is in full effect, and has already netted Americans about $10 billion in remedies from banks since it started its watch…

Elizabeth Warren has a new crusade, though, and it could fill that vast void: postal banking.

At this point, you may be asking yourself, what could possibly go wrong?

Daniel Greenfield of Frontpage Mag has a few thoughts on this:

The Post Office skill set has nothing to do with making loans. And offering loans to low-income people is a high risk business. That’s why it tends to come with high interest rates.

Low-cost, short-term loans is a formula for losing your shirt…

It’s not a solution. It just puts the taxpayers on the hook for a fortune in defaults. And it means that the government will either have to chase defaulting lenders or write off the losses.

With Dems at the wheel, you can guess which one it will be. And then the losses will get so bad, that the rates will shoot way up and collection agents will be hired to aggressively chase that debt. And, one suspects some of them will have Dem connections.

Whether or not this would work, one thing is sure. This is more proof that Democrats will run hard left in 2020. Gillibrand is clearly trying to get in on the ground floor.

Even though he’s not a member, it’s Bernie’s party now.


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OleDirtyBarrister | April 26, 2018 at 2:08 pm

What could possibly go wrong?

OleDirtyBarrister | April 26, 2018 at 2:12 pm

I am sure that the Postal & Loan Banks will be operated with the same wisdom, judgment, and aplomb as the House Bank. And Fannie, Freddie, Sallie, the old Savings & Loans institutions and Fed. Savings Banks that went bad, the FHA, the RTC, etc.

The leftists would never go for simply expanding eligibility to join the USPS workers’ credit union, because it would not allow them to do what they do in the world, which is pass needless legislation, expand govt, and put the country further in debt.

The government actually needs to privatize the Post Office and get it off of the gov’t books, not create another inefficient government run bank that will require a bailout at some point in the future due to mismanagement.

    Shane in reply to Ghost Rider. | April 26, 2018 at 5:55 pm

    Of all the blah, blah blah about constitutionality, the Post Office is ACTUALLY mandated directly by the constitution. To get rid of it would require an amendment, not something I think the Dems wouldn’t be very amenable to this without some serious consideration of their stupid ideas.

This is a SNL skit, right?

Who are these people who are so poor they are “unbanked”? You don’t have to be rich to get a free checking account. You don’t have to be rich to have a credit card. My 3 poor young adult children all have them. If you are being “victimized” by payday loan lenders it’s because of poor money management and decision making. Period.

    katiejane in reply to labrat. | April 26, 2018 at 3:19 pm

    My apologies . In my effort to reply to you I down voted your post. One reason some of the poor can’t get bank accounts or get credit cards is they don’t have legal work, they don’t have legal addresses, and they live in the shadows because they don’t have legal status.

      oldgoat36 in reply to katiejane. | April 26, 2018 at 3:33 pm

      While there are poor who move frequently, they can still get checking and banking accounts. Your stating the legal status is a bit of a key. If they aren’t legal, why should the American Taxpayer subsidize this losing venture? What is it with these politicians that have them working so hard to help those here illegally while making the life of those of us who pay the bills that much harder due to their social programs?

      Isn’t it funny, we had tons of people living through charity and handouts, and sure, they suffered quite a bit, during the depression, yet now, we have ridiculous numbers of social services and things are far worse than before. You would think that it would have people thinking maybe, just maybe, the systems are broken and don’t really help people as was claimed. Instead it’s double down on stupid and create more avenues for fraud and bilking the taxpayers out of ever more money to pump into a government that doesn’t function well.

      Mind boggling.

      Arminius in reply to katiejane. | April 26, 2018 at 7:08 pm

      This is the sound of the world’s smallest violin playing. They don’t have legal work? Yes, depositing money into a bank when you have no way to explain how you made that money because you’re a drug dealer or a prostitute will lead to embarrassing questions from the IRS. And they’re “living in the shadows” because they don’t have legal status? What shadows are illegal aliens living in?

      “DACA Protests And Arrests”

      You know who live in the shadows? Fugitives from justice. I may have missed it, but when have you advocated for American citizen criminals who have jumped bail or fled the consequences of the probation and/or parole violations?

      But illegal aliens don’t live in any shadows. They should but they don’t.

      Unless you’ve been smoking crack for the past 20 years you have to know of the phenomenon of “unaccompanied minors.” Teenagers who came here as minors while old enough to be charged as adults if they committed any other crimes. Often preteens, they crossed the border under their own volition.

      We are a nation of immigrants. So those among us as who immigrated here, the sons and daughters of immigrants, and the grandsons and grandaughters of immigrants of those of us who came here legally can smell the BS from a thousand miles away.

      I want illegal aliens to live in the same shadows as American fugitives of justice. It’s only fair.

      Arminius in reply to katiejane. | April 26, 2018 at 7:45 pm

      And by the way, don’t try to BS me. I’m not accusing you of lying, but merely repeating lies that may seem to make sense to you. In other words, you’re being taken advantage of.

      Having lived the American immigrant experience I can tell you that crossing the Atlantic didn’t turn my grandparents into Shakespearean actors or English professors. My grandmother never really learned English. My father, uncle, and aunt didn’t even understand English until they started school because Italian was the only language they could speak at home that everyone could understand. Despite being American citizens, born here, the only language they spoke and understood was Italian. So if for some reason it was necessary the USG could have sent the whole lot back to Salerno and everyone would have done just fine.

      When I’m told that Hispanics who came here as small children (and many not so small) don’t even speak Spanish well enough to move back to the country of their births I know I’m being lied to.

      Apparently you’re trying to tell me that crossing the Rio Grande or the Sonoran Desert has magical powers that crossing the Atlantic doesn’t, and the children their illegal alien parents bring with them don’t speak Spanish as their first language. Because the parents DO become English professors and Shakespearean actors by crossing the southern border illegally and English becomes the first language spoken in their homes by some wizardry unique to them and them alone.

      I have a bridge to sell you.

        katiejane in reply to Arminius. | April 26, 2018 at 8:35 pm

        If this is directed toward me it would appear that my post was not clear. By no means am I supporting the use of the Post Office as a banking venue. I was trying to give my opinion as to why they don’t have bank accounts. Seems like your thoughts agree with what I thought I was saying. Apparently not a good post on my part.

          Arminius in reply to katiejane. | April 27, 2018 at 7:29 pm

          Which is why I couched things in terms of what APPEARED to me to be so. This is the danger of written communication. Thanks for clarifying.

      PODKen in reply to katiejane. | April 27, 2018 at 6:05 pm

      Where I live it’s not free to have a checking account unless you maintain a minimum balance of about $2000. Otherwise your principal is eaten up by fees for every single service the bank provides you. That will be a factor for some people.

        randian in reply to PODKen. | April 27, 2018 at 8:11 pm

        Depends on what banks are available in your region. TD Bank has a checking account with a $100 minimum. Chase has no minimum with $500 a month in direct deposits. Plenty of credit unions make it easy to qualify for a very low or no minimum checking account.

    OleDirtyBarrister in reply to labrat. | April 26, 2018 at 3:39 pm

    There are people that keep their money out of banks for various reasons, such as ex wives and child support orders, outstanding judgements, tax liens, and to dodge the tax man.

    And there are people kept out of the banks by their check writing history and bad overall financial history and posture. The taxpayers do not need to be on the hook for that. If the Postal & Loan customers floated a bunch of bad checks and were put in jail, then the P&L would be the enemy of the poor for enforcing the rules against them.

    Giving home mortgages to people with a poor income history and bad financial management history did not work well, but the liberals want to do it again.

    Lending money and giving them check writing and credit card usage will not work out well either. The leftists would want to write it all off because the P&L was evil for allowing them to borrow so much money and get into debt.

      MajorWood in reply to OleDirtyBarrister. | April 28, 2018 at 5:16 pm

      Part of the housing bubble was created by giving loans to those who could not qualify under the old rules. This then increased demand, which increased prices, which created second mortgages so homeowners could use their house as a cheap credit card, until the bubble burst. There are laws of economics which should not be violated, and when they do, many suffer, and a few get rich. Making it easy for people to have things that they shouldn’t have, based on their unsound financial planning, only hurts those who have to pay up for them later. As my dad used to say when we were young, “look at what poor people do, and then do the opposite.”

      Check cashing operations don’t create poor people, but they do seem to locate their operations in areas where people already exhibit poor money management skills. Maybe politicians feel sorry for these people because they too have poor money managements skills, with other people’s money.

The Post Office has trouble enough merely delivering the mail. Though they don’t advertise it, many addresses get mail delivery only 5 days a week – or sometimes 4. And we’ve all noticed that not a year goes by without the price of postage going up.

The Post Office is not a bank, knows nothing about banking and frankly can’t even manage their own finances. They’ve NO place in public banking.

Besides, we’ve seen government forays into public lending – student loans, housing, mortgages for low income. None of those endeavors is exactly what you might call a financial success and some have been total fiascos.

Kirsten Gillebrand needs to go back to the drawing board.

    Merlin in reply to Granny. | April 26, 2018 at 3:24 pm

    The folks in my neighborhood personally re-deliver each other’s mail a couple of times a week because our letter carriers seem to think mail delivered to any mailbox in the subdivision is close enough. They can photograph mail as its being sorted and show you what you’ll be receiving in the next couple of days (well, somebody in the neighborhood will be receiving it), but they can’t seem to match the numbers on the mail with the numbers on the mailboxes. There’s no real reason to believe that USPS could handle even elementary banking services.

Doesn’t really matter which of the looney left’s premier idiots came up with this idea. This is a spectacularly bad idea, even by progressive democrat standards.

Is she freakin’ crazy?!!

It is the same as the VA a number of years ago. The system was winding down and they had to come up with every single possible way to keep it afloat. I get about 2 pieces of mail a month, a bank statement, and either a thank-you from the red cross for donating blood, or a reminder to donate blood. Power in .gov is measured by the size, not necessity or efficiency of your department, so you know those who head up the postal service are looking at nothing but a death spiral in their future.

Voice_of_Reason | April 26, 2018 at 3:27 pm

if the “underbanked” could and/or would pay their debts, they wouldn’t be “underbanked”.

it just like the so-called “food deserts” in the ghettos – traditional grocery stores get shoplifted to extinction and they can’t make a profit. if they could, there wouldn’t be “food deserts”.

and another point: why turn post offices into government banks? they have no competencies in banking. why not turn post offices into oil government change places? or for that matter, into government methadone clinics or government small particle physics research labs? makes about as much sense!

The last thing anyone needs, least of all the poor, is a loan.

“You know what you have when you don’t have loan payments? Money!!!” – Dave Ramsey

    94Corvette in reply to EdReynolds. | April 26, 2018 at 4:55 pm

    Can you imagine how much better life would be for the future generations if instead of SJW indoctrination they received sound money management skills – i.e. Financial University by Dave Ramsey? My wife and I subscribed to his philosophy decades ago, (we actually took the course before we got married so we would be on the same book with our finances) and now we’re approaching retirement debt free. Paying money to financial institutions costs the poor so much more than they ever realize.

This would be a spending debacle on the order of Obamacare. And countries that have such are not happy with them.

Leave it to a democrat to think this up and believe it is brilliant, when it is nothing more than a major net loss that the taxpayer will be bailing out. These leftists never stop looking for new ways to bribe voters with public funds, do they?

I thought there were laws against bribing people for votes, but then again, it’s democrats, so the laws don’t apply to them.

The code word for store closings due to shoplifting is “underperformance.” And they can’t counter shoplifting because corporate is terrified of any form of profiling or a lawsuit.

Now keep in mind that this closing was dead center in an area which would be full of underbanked people, bordering an area that even in Portland has been known for decades as “felony flats.” I stopped shopping there simple because I didn’t want to place my vehicle at risk for a break-in. And what is interesting is that the nearby Walmart is now more expensive than other chain stores in different areas. I guess Walmart employs an economic CYA formula.

Part of me wonders how long until Fred Meyer goes to a “Costco-lite” strategy requiring a membership card for entrance. IIRC, Costco acquires new members through the HR departments, thus ensuring that new members are employed. So I could see Kroger (Freddies) requiring either a paycheck stub or a checking account for membership. Portland excels at economic discrimination, where gentrification achieves results the klan could only dream of. The key is to make sure a different set of socialists is in power when the hammer falls, even though the current set is laying groundwork for the next mass move.

I wonder if the poor will need photo IDs to secure these loans . . . ?

Naaaaaaaah, that would *never* work, and would be racist to insist they obtain said ID cards!

That would just be a ploy to suppress them from getting the loan they have a right to.

One man, one loan!
Get a loan early, get a loan often!!

What a fucking moron. It’s all I can say. This type of thinking just pisses me off. What the fuck is wrong with these idiots? Is there NOTHING they don’t want the government to do? Just fuck off moron, just fuck off.

Your one stop shop . Get your loan and commit mail fraud

Henry Hawkins | April 26, 2018 at 5:24 pm

The Sanders/Gillibrand plan to turn the US Postal Service into a national bank is pure socialist claptrap, but it is also something much worse – a Trojan horse plan by which the federal government would begin the process of taking over the banking industry. They wouldn’t need to worry about nagging little details like paying overhead or making a profit, which will make them impossible for private sector banks to compete with.

The Friendly Grizzly | April 26, 2018 at 5:33 pm

“The unbanked”? Virtually anyone can open a bank account. Walk in the door of the bank, show valid ID, and open an account. Even most illegal aliens can open legitimate bank accounts at Wells Fargo, Bank of America, RegionsBanl and likely others because they accept Matricula Consular cards as proper ID.

The Friendly Grizzly | April 26, 2018 at 5:33 pm

“The unbanked”? Virtually anyone can open a bank account. Walk in the door of the bank, show valid ID, and open an account. Even most illegal aliens can open legitimate bank accounts at Wells Fargo, Bank of America, RegionsBanl and likely others because they accept Matricula Consular cards as proper ID.

The Friendly Grizzly | April 26, 2018 at 5:33 pm

I’m not sure what is causing these double posts I’ve been making, Appologies.

    JusticeDelivered in reply to The Friendly Grizzly. | April 26, 2018 at 7:45 pm

    I doubt that this is your fault, it is likely a web server problem. I am pretty sure that LS has a duplicate post function, where it will not add duplicate posts to the site.

nordic_prince | April 26, 2018 at 5:52 pm

Yet another example of American progressives just itching to imitate Europe. No thanks.

man this would SUCK compliance wise on credit unions. imagine banks would face same compliance issues.
ACH (automated clearing house) procedures used to actually process transactions would need to be rewritten regionally.

I’ll take Things No Sane Person Would Say for $100, Alex

She is one creepy broad. Been saying so since she first appeared in a newspaper article.

Senator Bernie Sanders discussed the marquee features of democratic socialism he’s been tirelessly calling for during his presidential campaign: higher taxes for the wealthiest Americans, an increased minimum wage, and breaking up the biggest Wall Street banks.

This is why the D’rats will never nominate Bernie, or anyone too much like him. They’re far too closely wedded to big money to take the subway all the way to Communist country. So anyone with eyes on the nomination has to be just barely socialist enough without overdoing it. It’s a tough needle to thread; Gillibrand seems to be gambling that this bit of silliness will do it.

ugottabekiddinme | April 26, 2018 at 7:44 pm

Is this woman really so dumb that she thinks just because the post offices have counters and the clerks have cash drawers, they are suited to become banks? What a maroon.

If their documentation requirements will be as lenient as I expect them to be the hypothetical Postal Service Bank will be a haven for money laundering.

I would rather deal with bankers in a real bank, who know how to handle money and finances, rather than from postal services employees, who know how to handle mail and packages.

In Israel you can pay utility bills get prepaid Debit Cards, exchange foreign currency and more at your local Post Office. The Post Office uses Gazelles of stead of the US Bald Eagle.

For Sanders/Gillebrand, it’s “Forward to 1911.”

P.S. Incidentally, depositors wishing to open postal savings accounts were also required to get fingerprinted from 1921 onward. I’ll bet Sanders/Gillebrand wouldn’t be big on that, would they?

Access to banking is a rural problem. When we lived on the farm we were two hours one way from a bank. When I was a kid there was a bank in our little town still forty minutes from our farm but we lived in the boonies but the deregulation closed small banks all over our state.

I don’t think the post office is the answer to our banking problem but it would be nice if the banks opened again. The financial sector sucks up thirty percent of the economy, be nice if they could do something in exchange for sucking the lifeblood of the nation.

Banks have become fussier about accepting customers. Part of this is because (like many businesses) they now have the tools to determine which customers are profitable and which are not.

And banks do sometimes get stuck with the cost of bounced checks, as there are regulatory limits on how long it can take for a check to clear, and account owners with questionable ID can and do just vanish if/when their balances go negative.

There’s a reason why there’s a market for Payday loans, and Rent-to-Own, etc. The reason is, some people just have chaotic lives and can’t or won’t save to buy anything, and many have such a short time horizon that they’ll choose to pay $1,000. now for something they could have for $300. if they’d just save their earnings for a few months.

You may call that poor financial managements skills but, really, it’s more of a choice. A choice I wouldn’t make and perhaps you wouldn’t make, but some will if they can. And not necessarily because they’re ignorant or don’t understand the terms and costs; it’s more that they want what they want now, and just don’t much care how much that costs.

And, yes, Wal-Mart does a pretty good job of offering financial services for those who won’t or can’t open a bank account.

And government steadily losing money by subsidizing deadbeat borrowers appears to be more a feature of this plan than a drawback. Because in this mindset it would be considered just plain unreasonable and mean to expect the poor poor to actually pay back these loans.

A basic no-cost checking account at a PostOffice branch. My my my that smacks of pinko commie fascist anarchism. What will the government do next? Actually make citizens pay taxes and give welfare to the poor. Money is for Wall Street only, don’t you remember your elementary school civics class. It is for those elite individuals who are elitely intelligent and elitely educated at our elite universities to make money from your money. The government must keep its dirty filthy hands from the clean pockets of the boyz on Wall Street. And to think otherwise just shows how much of a lazy no good commie pinko fascist your really are.

And, of course, as with any similarly and abjectly idiotic, ill-conceived, ill-advised and ill-considered Dumb-o-crat scheme from the apparatchik, self-styled “experts” on the Left, this scheme is a “solution” in search of a problem, which, if implemented, can be counted upon to cost a fortune (orders of magnitude more than the Dumb-o-crat beancounters will claim), to accomplish none of its stated policy goals, and, to inflict a host of deleterious socioeconomic and fiscal consequences, besides. As immutable and predictable as gravity or any other force or law of physics.

If they limited themselves to help the unbanked (what a word) by supplying check cashing ability OR a system whereby one could get a small dollar loan just before payday and that unless the loan was repaid, no more checks would be cashed, it might not be that bad.

But of course we know they can’t help themselves and it will be abused and ruined within a year by some bill to “correct” oversights in the previous bill that blows the whole thing up.