USPS Begins Postal Banking Pilot Program
October 7, 2021 5:26 PM Subscribe
“Offering new products and services that are affordable, convenient and secure aligns with the Postal Service’s Delivering for America 10-year plan to achieve financial sustainability and service excellence,” said USPS spokesperson [Tatiana] Roy in a statement to the Prospect. “This pilot, which is in collaboration with the American Postal Workers Union (APWU), is an example of how the Postal Service is leveraging its vast retail footprint and resources to innovate.” Executive editor David Dayen writes 1800 words for The American Prospect.
20 attorneys general file a complaint to block the Postal Service's strategic plan
not the banking part specifically, though
posted by Clowder of bats at 6:27 PM on October 7, 2021 [3 favorites]
not the banking part specifically, though
posted by Clowder of bats at 6:27 PM on October 7, 2021 [3 favorites]
Very much in favor of this in principle.
posted by aspersioncast at 6:36 PM on October 7, 2021 [1 favorite]
posted by aspersioncast at 6:36 PM on October 7, 2021 [1 favorite]
not the banking part specifically, though
Want Postal Banking? Fire Louis DeJoy [Revolving Door Project]
Last August, DeJoy reportedly began talks with JPMorgan Chase to install ATMs in post offices across the country, a proposal that would effectively grant the Wall Street giant an exclusive right to provide banking services to postal customers. Senator Sherrod Brown, a proponent of public postal banking, blasted DeJoy’s rumored plan as “another attempt for big banks and corporations to privatize our public infrastructure so their shareholders gain while working families suffer.” Former Labor Secretary Robert Reich and The American Prospect’s David Dayen echoed Brown, warning that DeJoy’s privatization scheme would rip off consumers and fail to help the unbanked. Nearly a year later, DeJoy has again snubbed proponents of postal banking by excluding the proposal from his 10-year overhaul plan for the agency.
posted by ryanshepard at 6:37 PM on October 7, 2021 [24 favorites]
Want Postal Banking? Fire Louis DeJoy [Revolving Door Project]
Last August, DeJoy reportedly began talks with JPMorgan Chase to install ATMs in post offices across the country, a proposal that would effectively grant the Wall Street giant an exclusive right to provide banking services to postal customers. Senator Sherrod Brown, a proponent of public postal banking, blasted DeJoy’s rumored plan as “another attempt for big banks and corporations to privatize our public infrastructure so their shareholders gain while working families suffer.” Former Labor Secretary Robert Reich and The American Prospect’s David Dayen echoed Brown, warning that DeJoy’s privatization scheme would rip off consumers and fail to help the unbanked. Nearly a year later, DeJoy has again snubbed proponents of postal banking by excluding the proposal from his 10-year overhaul plan for the agency.
posted by ryanshepard at 6:37 PM on October 7, 2021 [24 favorites]
DeJoy is trash….
But, despite my continuing to only ship USPS, it’s costing me sales…
I can ship more slowly, but cheaper through other shippers. And flat rate medium just jumped to $16.25 last week. Ugh.
posted by Windopaene at 6:43 PM on October 7, 2021 [4 favorites]
But, despite my continuing to only ship USPS, it’s costing me sales…
I can ship more slowly, but cheaper through other shippers. And flat rate medium just jumped to $16.25 last week. Ugh.
posted by Windopaene at 6:43 PM on October 7, 2021 [4 favorites]
I can ship more slowly, but cheaper through other shippers. And flat rate medium just jumped to $16.25 last week. Ugh.
Yep - all of this is, of course, working exactly as he intends.
posted by ryanshepard at 6:48 PM on October 7, 2021 [24 favorites]
Yep - all of this is, of course, working exactly as he intends.
posted by ryanshepard at 6:48 PM on October 7, 2021 [24 favorites]
The pilot program is terrible as-is. It amounts to USPS selling a not very good prepaid debit card for the usual price with the usual fees.
Real postal banking, on the other hand, could be very cheap or even free for people with an account because the staff is already being paid for and post offices are already set up to handle cash. The incremental costs that do exist could be funded from interchange fees. Throw an ATM in every post office with a modestly cheaper than usual fee for non-USPS card transactions and you could even turn it into a profit center while still helping out folks who aren't using USPS' banking services.
Given who is running the place, that is not at all what they are doing, of course. There's literally no reason to buy the card from USPS. You might as well go to CVS or Walgreen's. It's particularly sad since USPS sells money orders cheaper than anybody but Walmart. Well, cheaper than anybody else who will let you pay for them with a debit card. Where I live there's a chain of check cashing stores that sells money orders for $0, but they only accept cash so it's quite inconvenient unless you were using their overpriced check cashing service to begin with. If you need to cash a check and get a money order for some reason and are unbanked, Walmart is once again cheaper in most cases.
posted by wierdo at 7:10 PM on October 7, 2021 [18 favorites]
Real postal banking, on the other hand, could be very cheap or even free for people with an account because the staff is already being paid for and post offices are already set up to handle cash. The incremental costs that do exist could be funded from interchange fees. Throw an ATM in every post office with a modestly cheaper than usual fee for non-USPS card transactions and you could even turn it into a profit center while still helping out folks who aren't using USPS' banking services.
Given who is running the place, that is not at all what they are doing, of course. There's literally no reason to buy the card from USPS. You might as well go to CVS or Walgreen's. It's particularly sad since USPS sells money orders cheaper than anybody but Walmart. Well, cheaper than anybody else who will let you pay for them with a debit card. Where I live there's a chain of check cashing stores that sells money orders for $0, but they only accept cash so it's quite inconvenient unless you were using their overpriced check cashing service to begin with. If you need to cash a check and get a money order for some reason and are unbanked, Walmart is once again cheaper in most cases.
posted by wierdo at 7:10 PM on October 7, 2021 [18 favorites]
I don't even trust the USPS to deliver my mail at this point, but of course I don't have a choice. When I first moved, my new address wasn't in their verification system for months, so many shippers "helpfully" corrected it to the wrong address. Right now, I have a PO Box set up with mail forwarding - probably a quarter of my mail still shows up at the original address. I don't know how much mail is never delivered, or is simply returned to sender.
The claim that they have resources to innovate is questionable - one of their biggest innovations, the self-service kiosk, was removed from my local post office years ago, moved to busier post offices, and never returned. Even when it was there, the office still had the same hours as before, so you couldn't ship anything on a Sunday or after work hours. The lines are often long, especially during tax and holiday season.
But kudos to them for trying to take on the sleazy check-cashing industry.
posted by meowzilla at 7:23 PM on October 7, 2021 [2 favorites]
The claim that they have resources to innovate is questionable - one of their biggest innovations, the self-service kiosk, was removed from my local post office years ago, moved to busier post offices, and never returned. Even when it was there, the office still had the same hours as before, so you couldn't ship anything on a Sunday or after work hours. The lines are often long, especially during tax and holiday season.
But kudos to them for trying to take on the sleazy check-cashing industry.
posted by meowzilla at 7:23 PM on October 7, 2021 [2 favorites]
Should be USPS cryptocurrency.
The USPS has missed chances from technology: like why not have the USPS run secure DNS ? Isn't delivery their wheelhouse ?
Why don't I have a USPS email address ? Don't they do mail ?
posted by NoThisIsPatrick at 8:02 PM on October 7, 2021 [1 favorite]
The USPS has missed chances from technology: like why not have the USPS run secure DNS ? Isn't delivery their wheelhouse ?
Why don't I have a USPS email address ? Don't they do mail ?
posted by NoThisIsPatrick at 8:02 PM on October 7, 2021 [1 favorite]
Informed Delivery has been really useful, would recommend and it’s free.
posted by Brandon Blatcher at 8:05 PM on October 7, 2021 [28 favorites]
posted by Brandon Blatcher at 8:05 PM on October 7, 2021 [28 favorites]
Absolute insanity that Louis DeJoy still holds his post.
posted by Gadarene at 8:06 PM on October 7, 2021 [49 favorites]
posted by Gadarene at 8:06 PM on October 7, 2021 [49 favorites]
DeJoy should be in a maximum security prison for helping Trump commit sedition.
posted by They sucked his brains out! at 8:33 PM on October 7, 2021 [11 favorites]
posted by They sucked his brains out! at 8:33 PM on October 7, 2021 [11 favorites]
Absolute insanity that Louis DeJoy still holds his post.
It's strangely nearly impossible to just fire a Postmaster General. [Slate link]
posted by hippybear at 8:41 PM on October 7, 2021 [6 favorites]
It's strangely nearly impossible to just fire a Postmaster General. [Slate link]
posted by hippybear at 8:41 PM on October 7, 2021 [6 favorites]
Informed Delivery has been really useful, would recommend and it’s free.
Great point, and I agree completely. When I misread that informed delivery app was being discontinued I was upset. But then I saw that USPS rolled it into their standard app.
And the photos of mail in Informed Delivery has been a blessing. It helped me catch an ex using my address for fraud.
posted by NoThisIsPatrick at 8:51 PM on October 7, 2021 [6 favorites]
Great point, and I agree completely. When I misread that informed delivery app was being discontinued I was upset. But then I saw that USPS rolled it into their standard app.
And the photos of mail in Informed Delivery has been a blessing. It helped me catch an ex using my address for fraud.
posted by NoThisIsPatrick at 8:51 PM on October 7, 2021 [6 favorites]
The USPS has missed chances from technology: like why not have the USPS run secure DNS ? Isn't delivery their wheelhouse ?
How is DNS a form of delivery? It's more analogous to the yellow pages than to package delivery, isn't it?
posted by Dysk at 9:14 PM on October 7, 2021 [6 favorites]
How is DNS a form of delivery? It's more analogous to the yellow pages than to package delivery, isn't it?
posted by Dysk at 9:14 PM on October 7, 2021 [6 favorites]
I do have to say, back in the 80s when I was in Germany as an exchange student, I found it exceedingly odd that the Deutsche Post was also the main Bank, and that people didn't send checks through the mail, but instead they went to the post office with information about the transaction to be made and it was done electronically and basically instantly.
This was in the 80s.
I don't know what role Deutcshe Post plays in today's Germany, but coming from the US it was a remarkable difference in how societies functioned on a "I thought it was done universally this way" level.
It served as a good lesson in "what you know isn't what is universal". That along with the shelf in the toilet.
posted by hippybear at 9:21 PM on October 7, 2021 [14 favorites]
This was in the 80s.
I don't know what role Deutcshe Post plays in today's Germany, but coming from the US it was a remarkable difference in how societies functioned on a "I thought it was done universally this way" level.
It served as a good lesson in "what you know isn't what is universal". That along with the shelf in the toilet.
posted by hippybear at 9:21 PM on October 7, 2021 [14 favorites]
From that Feb. Slate link: Biden can attempt to oust DeJoy indirectly, but that option is fraught with legal uncertainties, and certain to trigger Republican complaints of norm busting.
DeJoy lied under oath, tampered with the election, and is under DOJ investigation for his previous political fundraising/employee extortion (CBS, June). In August: Louis DeJoy Comes Under Scrutiny — Again — As USPS Awards $120 Million Contract To His Former Employer (Forbes). I want postal banking, too, but not under DeJoy's leadership. He'll get grease all over it.
The USPS delivery slowdown started last Friday.
posted by Iris Gambol at 9:43 PM on October 7, 2021 [27 favorites]
DeJoy lied under oath, tampered with the election, and is under DOJ investigation for his previous political fundraising/employee extortion (CBS, June). In August: Louis DeJoy Comes Under Scrutiny — Again — As USPS Awards $120 Million Contract To His Former Employer (Forbes). I want postal banking, too, but not under DeJoy's leadership. He'll get grease all over it.
The USPS delivery slowdown started last Friday.
posted by Iris Gambol at 9:43 PM on October 7, 2021 [27 favorites]
i'm excited to the US coming onboard with the concept of 'agent banking' (another source, which is in powerpoint), which is something that's seriously pursued elsewhere in the work for financial inclusion. the postal services have been a standard stakeholder in the expansion of access to financial services in this.
posted by cendawanita at 9:56 PM on October 7, 2021 [1 favorite]
posted by cendawanita at 9:56 PM on October 7, 2021 [1 favorite]
I've recently heard conservatives parroting the talking point that the USPS is obsolete and needs to go. I guess they think it will be much more efficient to have our mail delivered in a $50,000 Mercedes gas guzzler driven by a non-union contractor. Because privatization always works out better for everybody. /s
posted by ambulocetus at 10:05 PM on October 7, 2021 [2 favorites]
posted by ambulocetus at 10:05 PM on October 7, 2021 [2 favorites]
Latin America is also very active in this. Brazil is a pioneering country (globally even) in this process. Which is good for the US I reckon, because it's closer regionally so it should be easier at the civilian level to learn more about it from your peers, not just at govt-2-govt level. If you can read pdfs, here's a discussion paper on the region.
On Germany - that makes sense, as for whatever reason, at the international development level, they're very keen to support this with actual resources (other than the usual suspects ie World Bank and the UN via the UNCDF).
posted by cendawanita at 10:17 PM on October 7, 2021
On Germany - that makes sense, as for whatever reason, at the international development level, they're very keen to support this with actual resources (other than the usual suspects ie World Bank and the UN via the UNCDF).
posted by cendawanita at 10:17 PM on October 7, 2021
I don't know what role Deutcshe Post plays in today's Germany,
It's been bought by the American company DHL. Hooray....
posted by starfishprime at 11:06 PM on October 7, 2021 [1 favorite]
It's been bought by the American company DHL. Hooray....
posted by starfishprime at 11:06 PM on October 7, 2021 [1 favorite]
USPS Begins Postal Banking Pilot Program
The test allows customers to cash business or payroll checks at the post office and place them onto a gift card
Sorry USA but you don't have a fricken clue how to do retail banking. You are so behind the times that you still use paper cheques and are just now! introducing banking into post offices. USA, when was the last time you looked at how another advanced nation does things and thought: "Oo, that country has a simple, cheap, effective and technologically advanced way of managing domestic, retail and public financial transactions, let's follow them!" Because frankly, your banking system and its cost and inconvenience to the general public kinda makes you a laughing stock to all other advanced economies. Banking doesn't have to be difficult. Unless gouging people for transaction fees, late fees, cheque cashing fees is part of your income model. Oh, wait...
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is. Your banking system is designed to take your money, and only give some of it back. Vote with your wallets. Demand better banking. It's out there.
posted by Thella at 12:20 AM on October 8, 2021 [19 favorites]
The test allows customers to cash business or payroll checks at the post office and place them onto a gift card
Sorry USA but you don't have a fricken clue how to do retail banking. You are so behind the times that you still use paper cheques and are just now! introducing banking into post offices. USA, when was the last time you looked at how another advanced nation does things and thought: "Oo, that country has a simple, cheap, effective and technologically advanced way of managing domestic, retail and public financial transactions, let's follow them!" Because frankly, your banking system and its cost and inconvenience to the general public kinda makes you a laughing stock to all other advanced economies. Banking doesn't have to be difficult. Unless gouging people for transaction fees, late fees, cheque cashing fees is part of your income model. Oh, wait...
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is. Your banking system is designed to take your money, and only give some of it back. Vote with your wallets. Demand better banking. It's out there.
posted by Thella at 12:20 AM on October 8, 2021 [19 favorites]
Edit. Sorry for harping on but banking is one area where the USA is just unadvanced. Nobody pays banking fees (except credit fees, and some special account-type fees) in Australia. Everything is electronic. Everything is close to instant or 3 business days max. Nobody is excluded because they are poor. Fee-free access to wages is federally legislated.
Banks in Australia make their money by being streamlined in their services (far fewer street-front branches these days), paying low rates of interest on savings accounts, and making money on lending. Our money (or debts) is the product they make their money on and they don't charge us much for their access to it.
This was in the 80s.
My boyfriend in 1979 lamented Australia's banking system because he'd arrived from Germany where he relied on automatic teller machines to obtain money for his track (horses) habit. It wasn't until ATMs become common in the mid 1980s that I fully understood his loss.
posted by Thella at 12:43 AM on October 8, 2021 [2 favorites]
Banks in Australia make their money by being streamlined in their services (far fewer street-front branches these days), paying low rates of interest on savings accounts, and making money on lending. Our money (or debts) is the product they make their money on and they don't charge us much for their access to it.
This was in the 80s.
My boyfriend in 1979 lamented Australia's banking system because he'd arrived from Germany where he relied on automatic teller machines to obtain money for his track (horses) habit. It wasn't until ATMs become common in the mid 1980s that I fully understood his loss.
posted by Thella at 12:43 AM on October 8, 2021 [2 favorites]
I don't know what role Deutcshe Post plays in today's Germany,
It's a bit confusing, but the Postbank isn't actually part of Deutsche Post anymore. Instead it's now part of Deutsche Bank. (See the wiki page for more details.) But that doesn't change the fact that functionally post office branches act as bank branches as well, and offer all of the services of a bank. (Though most people will use online banking these days instead.)
posted by scorbet at 3:46 AM on October 8, 2021 [1 favorite]
It's a bit confusing, but the Postbank isn't actually part of Deutsche Post anymore. Instead it's now part of Deutsche Bank. (See the wiki page for more details.) But that doesn't change the fact that functionally post office branches act as bank branches as well, and offer all of the services of a bank. (Though most people will use online banking these days instead.)
posted by scorbet at 3:46 AM on October 8, 2021 [1 favorite]
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is.
The US had postal banking in the mid-20th century. It went a away largely because it was seen as superfluous as, at the time, banks didn't charge much in the way of fees on deposit accounts.
Even 20 years ago it was weird to me that anyone would pay a fee for a checking or savings account. If someone wrote you a check and you didn't have a bank account, it wasn't a problem, just go to their bank and cash it. Again, with no fee. I usually did that even though I did have a bank account because that way I didn't have to worry about whether the check was good or not.
It always struck me as ridiculous that banks were allowed to charge a fee for cashing a check their customer wrote. They aren't really paying the check as instructed if they hold back some of the funds, after all.
There do exist some reasonable banks even today, so I know it can be done, but it would give the shareholders a sad if profits were marginally lower, so it's gotten pretty rare to find a bank that has true free checking accounts in the US.
The worst part about this supposed postal banking pilot is that they didn't partner with one of the less abusive prepaid debit card vendors, but one that charges lots of expensive fees. As I said before, it's an abuse of language to call it postal banking. Supposedly the pilot is to be expanded into something resembling actual banking services some time next year. We'll see.
posted by wierdo at 4:28 AM on October 8, 2021 [6 favorites]
The US had postal banking in the mid-20th century. It went a away largely because it was seen as superfluous as, at the time, banks didn't charge much in the way of fees on deposit accounts.
Even 20 years ago it was weird to me that anyone would pay a fee for a checking or savings account. If someone wrote you a check and you didn't have a bank account, it wasn't a problem, just go to their bank and cash it. Again, with no fee. I usually did that even though I did have a bank account because that way I didn't have to worry about whether the check was good or not.
It always struck me as ridiculous that banks were allowed to charge a fee for cashing a check their customer wrote. They aren't really paying the check as instructed if they hold back some of the funds, after all.
There do exist some reasonable banks even today, so I know it can be done, but it would give the shareholders a sad if profits were marginally lower, so it's gotten pretty rare to find a bank that has true free checking accounts in the US.
The worst part about this supposed postal banking pilot is that they didn't partner with one of the less abusive prepaid debit card vendors, but one that charges lots of expensive fees. As I said before, it's an abuse of language to call it postal banking. Supposedly the pilot is to be expanded into something resembling actual banking services some time next year. We'll see.
posted by wierdo at 4:28 AM on October 8, 2021 [6 favorites]
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is.
Know that only a fraction of the problem is because average people don't know any better. Most of it is because of the incredible corruption of US government. People are like "why not do it this way, it's better and cheaper!" and the reason we don't do things that way is because that way is better and cheaper. When it's better and cheaper, there's no profit for the middle man and people don't pay for extra services to work around the system's flaws. There's no money to be made in providing efficient, effective services to the average person, and there's a lot of money to be made in leeching money from the bottom 75% and selling expensive luxury to the top.
posted by Frowner at 4:44 AM on October 8, 2021 [22 favorites]
Know that only a fraction of the problem is because average people don't know any better. Most of it is because of the incredible corruption of US government. People are like "why not do it this way, it's better and cheaper!" and the reason we don't do things that way is because that way is better and cheaper. When it's better and cheaper, there's no profit for the middle man and people don't pay for extra services to work around the system's flaws. There's no money to be made in providing efficient, effective services to the average person, and there's a lot of money to be made in leeching money from the bottom 75% and selling expensive luxury to the top.
posted by Frowner at 4:44 AM on October 8, 2021 [22 favorites]
It's a bit confusing in Ireland too. An Post (roughly pronounced 'on pust') moved into retail banking a while back, and now have partnerships with the two main retail banks (Bank of Ireland and Allied Irish Banks) and they're all consolidating (meaning closing) physical branches as people move to online-only options like Revolut, meaning that you could be a Bank of Ireland customer, but have to go to your local post office to see a cashier in person.
posted by kersplunk at 4:50 AM on October 8, 2021
posted by kersplunk at 4:50 AM on October 8, 2021
The US banking system does a lot of the weird stuff it does because we technically don't have national banks, and we legally didn't have national banks really until 30 years ago. The path dependency around that is pretty remarkable. Add in a big pile of the US innovating first, and then subsequent innovations superseding how the US decided to do it, and you get the system we have.
That said the person who said Australian Banks are good for consumers made me LOL. It and Canada are the two most oligopolistic and excessively profitable banking sectors in the world. Low fees but high spreads still means you are paying a lot for someone to take a deposit from you.
This Postal Bank thing isn't remotely a bank, but it is great to disintermediate the check cashers (of course CashApp and Venmo are chasing after the same bezzle but no one seems to want to regulate them either)
posted by JPD at 5:09 AM on October 8, 2021
That said the person who said Australian Banks are good for consumers made me LOL. It and Canada are the two most oligopolistic and excessively profitable banking sectors in the world. Low fees but high spreads still means you are paying a lot for someone to take a deposit from you.
This Postal Bank thing isn't remotely a bank, but it is great to disintermediate the check cashers (of course CashApp and Venmo are chasing after the same bezzle but no one seems to want to regulate them either)
posted by JPD at 5:09 AM on October 8, 2021
It's a real shame this is such a poorly implemented pilot. There are advocates for postal banking up here in Canada, too, and I think it would be a great step forward. It would both help our post office, which is struggling now that their deliveries have switched from a lot of low cost to deliver envelopes to big, hard to deliver parcels, and put pressure on our big banks who charge ridiculous, non-competitive fees and do so particularly pointedly to people who live paycheque to paycheque. Oh, and also, it would make things better for a whole lot of Canadians.
posted by jacquilynne at 5:15 AM on October 8, 2021 [2 favorites]
posted by jacquilynne at 5:15 AM on October 8, 2021 [2 favorites]
I've recently heard conservatives parroting the talking point that the USPS is obsolete and needs to go.
Completely gone? Wouldn't that require a Constitutional amendment?
posted by Thorzdad at 5:24 AM on October 8, 2021 [4 favorites]
Completely gone? Wouldn't that require a Constitutional amendment?
posted by Thorzdad at 5:24 AM on October 8, 2021 [4 favorites]
It's a bit confusing in Ireland too. An Post (roughly pronounced 'on pust') moved into retail banking a while back, and now have partnerships with the two main retail banks (Bank of Ireland and Allied Irish Banks) and they're all consolidating (meaning closing) physical branches as people move to online-only options like Revolut, meaning that you could be a Bank of Ireland customer, but have to go to your local post office to see a cashier in person.
They are doing correspondent banking. Basically the banks are paying the postal service to serve as the front end of the bank. So the banking function is still run to maximize RoE. Banks aren't actually losing deposits to on-line only banks like revolut in any material way. But people do massively prefer to use the banks own digital apps rather than visit a branch - and branches are expensive. So you close branches.
posted by JPD at 5:28 AM on October 8, 2021
They are doing correspondent banking. Basically the banks are paying the postal service to serve as the front end of the bank. So the banking function is still run to maximize RoE. Banks aren't actually losing deposits to on-line only banks like revolut in any material way. But people do massively prefer to use the banks own digital apps rather than visit a branch - and branches are expensive. So you close branches.
posted by JPD at 5:28 AM on October 8, 2021
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is.
Beyond the fact that the majority of the US population never so much as step outside its borders in their lifetimes, a not-insubstantial chunk of the population don't have bank accounts at all. They live paycheck-to-paycheck. And, many of those that do have accounts, have only checking accounts. That is to say, not anything devoted to accruing savings. So, the idea that the banking system is behind the times is way down the list of financial issues many people concern themselves with.
posted by Thorzdad at 5:33 AM on October 8, 2021 [1 favorite]
Beyond the fact that the majority of the US population never so much as step outside its borders in their lifetimes, a not-insubstantial chunk of the population don't have bank accounts at all. They live paycheck-to-paycheck. And, many of those that do have accounts, have only checking accounts. That is to say, not anything devoted to accruing savings. So, the idea that the banking system is behind the times is way down the list of financial issues many people concern themselves with.
posted by Thorzdad at 5:33 AM on October 8, 2021 [1 favorite]
the unbanked are roughly the same % of the population in both the US and the EU. About 5%-6%.
posted by JPD at 5:36 AM on October 8, 2021 [3 favorites]
posted by JPD at 5:36 AM on October 8, 2021 [3 favorites]
And, many of those that do have accounts, have only checking accounts. That is to say, not anything devoted to accruing savings.
this is definitely where the 'third world' has a lot to offer to early movers now-laggards like the US. In addition to agent banking that I mentioned (also referred to in this thread as correspondent banking), mobile number-based digital wallets are also another avenue to encourage savings. Kenya gets a lot of press about their M-PESA system (for an example of such a thing). I totally understand why Venmo and Cashapp (which is something like that) exist in the US, it's filling a vacuum other systems have developed a bit more systematically. I wonder if there's any kind of grassroots movement in North American that can take advantage of all the peer learning available within that financial inclusion sector? I've linked to CFI and AFI resources upthread, but there's also CGAP and UNCDF , as well as numerous others.
It's always been honestly ironic to me that I see the World Bank presence regularly in this space (they would host meetings in DC every spring), and yet barely little of that gets out into the wider American domestic society. And personally, I'm happy to share resources. In the Facebook threads I've been trying to advocate for Americans to help the world to do something politically about that American company considering its negative impact to the global society, in this regard, at least this is something the world has something to offer, imo.
posted by cendawanita at 6:14 AM on October 8, 2021 [3 favorites]
this is definitely where the 'third world' has a lot to offer to early movers now-laggards like the US. In addition to agent banking that I mentioned (also referred to in this thread as correspondent banking), mobile number-based digital wallets are also another avenue to encourage savings. Kenya gets a lot of press about their M-PESA system (for an example of such a thing). I totally understand why Venmo and Cashapp (which is something like that) exist in the US, it's filling a vacuum other systems have developed a bit more systematically. I wonder if there's any kind of grassroots movement in North American that can take advantage of all the peer learning available within that financial inclusion sector? I've linked to CFI and AFI resources upthread, but there's also CGAP and UNCDF , as well as numerous others.
It's always been honestly ironic to me that I see the World Bank presence regularly in this space (they would host meetings in DC every spring), and yet barely little of that gets out into the wider American domestic society. And personally, I'm happy to share resources. In the Facebook threads I've been trying to advocate for Americans to help the world to do something politically about that American company considering its negative impact to the global society, in this regard, at least this is something the world has something to offer, imo.
posted by cendawanita at 6:14 AM on October 8, 2021 [3 favorites]
(and a lot of times, economic issues plays very well for populist governments of any flavour, so generally speaking, for once, it's a space that doesn't get *too* interrupted by human rights, however galling it is to write that. as a result, there's a lot of movement in unlikely places)
posted by cendawanita at 6:19 AM on October 8, 2021
posted by cendawanita at 6:19 AM on October 8, 2021
Biden can attempt to oust DeJoy indirectly, but that option is fraught with legal uncertainties, and certain to trigger Republican complaints of norm busting.
Of course, it's up to the media whether to take "Republican complaints of norm busting" seriously. (Ron Howard narrator voice: They will.)
posted by Gelatin at 6:33 AM on October 8, 2021 [5 favorites]
Of course, it's up to the media whether to take "Republican complaints of norm busting" seriously. (Ron Howard narrator voice: They will.)
posted by Gelatin at 6:33 AM on October 8, 2021 [5 favorites]
Such a weird timeline when "actively trying to destroy and discredit the institution" isn't enough to get a leader fired.
posted by DirtyOldTown at 6:35 AM on October 8, 2021 [4 favorites]
posted by DirtyOldTown at 6:35 AM on October 8, 2021 [4 favorites]
And, many of those that do have accounts, have only checking accounts. That is to say, not anything devoted to accruing savings.
this is definitely where the 'third world' has a lot to offer to early movers now-laggards like the US. In addition to agent banking that I mentioned (also referred to in this thread as correspondent banking), mobile number-based digital wallets are also another avenue to encourage savings. Kenya gets a lot of press about their M-PESA system (for an example of such a thing). I totally understand why Venmo and Cashapp (which is something like that) exist in the US, it's filling a vacuum other systems have developed a bit more systematically. I wonder if there's any kind of grassroots movement in North American that can take advantage of all the peer learning available within that financial inclusion sector? I've linked to CFI and AFI resources upthread, but there's also CGAP and UNCDF , as well as numerous others.
I'm not sure what the problem you are trying to solve here is. . MPESA is actually a really expensive form of payments and doesn't actually solve a need in the US. The spreads on MPESA savings products are horrifying. You can deposit at 6% and I can earn 8% on a 3 month Kenyan government bond (and w/o knowing anything about how those deposits behave I would guess a bank can actually term it out materially longer than that). Thats incredible business
CashApp and Venmo do all kinds of shady things like charge outrageous APRs on short term "early pay payments" and use cards co-issued by small banks that are allowed to charge higher interchange rates (as a tacit subsidy for providing community banking w/debit cards) where the issuing banks kick them back some of the vig.
I'm also not sure why the distinction between having only a current account and a savings account mean much of anything here. If you have excess cash you open a savings account. The lack of a savings account is an income issue. Solve the income issue.
Should the US have a zero cost, instant transfer option. Yes - of course. But a lot of this other stuff is a solution in search of a problem.
posted by JPD at 7:27 AM on October 8, 2021 [1 favorite]
this is definitely where the 'third world' has a lot to offer to early movers now-laggards like the US. In addition to agent banking that I mentioned (also referred to in this thread as correspondent banking), mobile number-based digital wallets are also another avenue to encourage savings. Kenya gets a lot of press about their M-PESA system (for an example of such a thing). I totally understand why Venmo and Cashapp (which is something like that) exist in the US, it's filling a vacuum other systems have developed a bit more systematically. I wonder if there's any kind of grassroots movement in North American that can take advantage of all the peer learning available within that financial inclusion sector? I've linked to CFI and AFI resources upthread, but there's also CGAP and UNCDF , as well as numerous others.
I'm not sure what the problem you are trying to solve here is. . MPESA is actually a really expensive form of payments and doesn't actually solve a need in the US. The spreads on MPESA savings products are horrifying. You can deposit at 6% and I can earn 8% on a 3 month Kenyan government bond (and w/o knowing anything about how those deposits behave I would guess a bank can actually term it out materially longer than that). Thats incredible business
CashApp and Venmo do all kinds of shady things like charge outrageous APRs on short term "early pay payments" and use cards co-issued by small banks that are allowed to charge higher interchange rates (as a tacit subsidy for providing community banking w/debit cards) where the issuing banks kick them back some of the vig.
I'm also not sure why the distinction between having only a current account and a savings account mean much of anything here. If you have excess cash you open a savings account. The lack of a savings account is an income issue. Solve the income issue.
Should the US have a zero cost, instant transfer option. Yes - of course. But a lot of this other stuff is a solution in search of a problem.
posted by JPD at 7:27 AM on October 8, 2021 [1 favorite]
yep, i agree with those critiques, but income-chasing-savings-chasing-income isn't a problem that's so uniquely american. maybe with that american attention, the field can have some invigorated thinking beyond the washington consensus.
posted by cendawanita at 7:38 AM on October 8, 2021
posted by cendawanita at 7:38 AM on October 8, 2021
Hmm, since as people have been pointing out that it's nearly impossible to fire a postmaster general, how about we remove all of his power to do , well, anything. Set up a supervisory board that makes all the decisions, and buy him a pair of those giant scissors so he can preside over post office openings. I'm sure he must have a nice suit somewhere.
posted by evilDoug at 8:41 AM on October 8, 2021 [2 favorites]
posted by evilDoug at 8:41 AM on October 8, 2021 [2 favorites]
Should be USPS cryptocurrency.
Oh definitely not. Crypto is just libertarian window dressing on a ponzi scheme.
posted by axiom at 9:12 AM on October 8, 2021 [17 favorites]
Oh definitely not. Crypto is just libertarian window dressing on a ponzi scheme.
posted by axiom at 9:12 AM on October 8, 2021 [17 favorites]
If all the USPS wants to do is be a point of service for another bank, that bank can be the Fed itself.
posted by snuffleupagus at 10:49 AM on October 8, 2021
posted by snuffleupagus at 10:49 AM on October 8, 2021
People of the USA. If you have not lived off-shore and seen how other countries do things, you don't realise how mid-20thC your system is. Your banking system is designed to take your money, and only give some of it back. Vote with your wallets. Demand better banking. It's out there.--Thella
Does Japan count? Because I noticed that their system is much more convoluted and paper based than the US.
I haven't visited any European nations recently, but there's lots of innovative stuff happening in the US, including lots of on-line only banks, many online payment companies (that's how my kids do a lot of their purchasing payments), and Google and Apple Pay. I could be defensive and snarky and say 'do you guys have Google and Apple Pay in Europe? In which country did these services originate?'
Getting back to the topic at hand, having the post office do banking seems kind of quaint and old-fashioned to me. It is like doing banking at the town's 'general store'.
posted by eye of newt at 11:32 AM on October 8, 2021 [2 favorites]
Does Japan count? Because I noticed that their system is much more convoluted and paper based than the US.
I haven't visited any European nations recently, but there's lots of innovative stuff happening in the US, including lots of on-line only banks, many online payment companies (that's how my kids do a lot of their purchasing payments), and Google and Apple Pay. I could be defensive and snarky and say 'do you guys have Google and Apple Pay in Europe? In which country did these services originate?'
Getting back to the topic at hand, having the post office do banking seems kind of quaint and old-fashioned to me. It is like doing banking at the town's 'general store'.
posted by eye of newt at 11:32 AM on October 8, 2021 [2 favorites]
It always blows me away just how *many* banks there are in the US (loosely using the term to be inclusive of credit unions, savings and loan, state banks, Federal banks, etc., and I mean actual banks - not branches). It's well over 5,000 all the way from A A A Federal Credit Union to Zions Bank . I mean I'm sure there is a reason that we need the Pontiac Dwight Prison Employees Credit Union, and Fairbanks needs its own Mt. McKinley Bank, and 1st Bank in Hominy exists, but just seems very inefficient - especially if there is still a significant unbanked population despite the volume of banks that exist.
posted by inflatablekiwi at 11:49 AM on October 8, 2021
posted by inflatablekiwi at 11:49 AM on October 8, 2021
Google and Apple Pay haven't got much traction in Poland because they lagged behind the homemade Blik system. It integrates pay-by-phone number, paying by a unique one-time code with two-factor authentication (I basically never type in my card number online) and NFC payments. The concept of paying a fee for a transfer or actually having a physical cheque hasn't existed in over a decade now, as long as you use online banking. Transfers between banks take one working day at most, with an instant clearing option that does have a fee. An exclusively online bank I use has been in operation since 2001.
Our postal banking is actually a minor disaster, chiefly because by the time it got started legacy banks and new entrants had scooped up all people who wanted a bank account. The post still makes a pretty penny off fees on postal money orders, basically money transfers where you pay cash and it ends up in someone's bank account. Sort of like a reverse cheque system except the recipient doesn't have to pay or do anything.
Interestingly, the most frequent banking fraud here is when someone asks you to send a small transfer somewhere and uses that to steal your identity, because it turns out the other account was opened online in your name. The main fraud for our Ebay equivalent is stealing banking credentials by asking people to use a "special payment system" and other phishing methods. Definitely preferable and easier to protect yourself from than what seems to be the American norm of cheques and wire transfers not clearing properly for weeks!
posted by I claim sanctuary at 11:54 AM on October 8, 2021 [3 favorites]
Our postal banking is actually a minor disaster, chiefly because by the time it got started legacy banks and new entrants had scooped up all people who wanted a bank account. The post still makes a pretty penny off fees on postal money orders, basically money transfers where you pay cash and it ends up in someone's bank account. Sort of like a reverse cheque system except the recipient doesn't have to pay or do anything.
Interestingly, the most frequent banking fraud here is when someone asks you to send a small transfer somewhere and uses that to steal your identity, because it turns out the other account was opened online in your name. The main fraud for our Ebay equivalent is stealing banking credentials by asking people to use a "special payment system" and other phishing methods. Definitely preferable and easier to protect yourself from than what seems to be the American norm of cheques and wire transfers not clearing properly for weeks!
posted by I claim sanctuary at 11:54 AM on October 8, 2021 [3 favorites]
especially if there is still a significant unbanked population despite the volume of banks that exist.
Setting aside the question of whether the correct number of firms is calculable, and focusing on the question of unbanked: my understanding is that many of the unbanked are wary of any formal systems that report to the IRS, ICE, etc. I'm not sure how moving the banking system to the government addresses those concerns. The post office has its own armed law enforcement division!
posted by pwnguin at 12:01 PM on October 8, 2021 [2 favorites]
Setting aside the question of whether the correct number of firms is calculable, and focusing on the question of unbanked: my understanding is that many of the unbanked are wary of any formal systems that report to the IRS, ICE, etc. I'm not sure how moving the banking system to the government addresses those concerns. The post office has its own armed law enforcement division!
posted by pwnguin at 12:01 PM on October 8, 2021 [2 favorites]
Definitely preferable and easier to protect yourself from than what seems to be the American norm of cheques and wire transfers not clearing properly for weeks!
except because of this the substitute for an instant bank transfer (which is what the US should have but doesn't) are credit and debit cards. Also don't forget US credit cards users are protected from fraud. The issue here isn't speed or safety, but rather cost as the banks get 1.9% on average of the transaction (from the vendor.) And we have that because at some point in the 80's we came up with this as a solution.
posted by JPD at 12:27 PM on October 8, 2021
except because of this the substitute for an instant bank transfer (which is what the US should have but doesn't) are credit and debit cards. Also don't forget US credit cards users are protected from fraud. The issue here isn't speed or safety, but rather cost as the banks get 1.9% on average of the transaction (from the vendor.) And we have that because at some point in the 80's we came up with this as a solution.
posted by JPD at 12:27 PM on October 8, 2021
"I've recently heard conservatives parroting the talking point that the USPS is obsolete and needs to go."
I mean, I, too, think the US Constitution is archaic...
Difference is I don't go pfaffing about it's sacredness and then demand violating that sacredness.
posted by symbioid at 12:33 PM on October 8, 2021 [1 favorite]
I mean, I, too, think the US Constitution is archaic...
Difference is I don't go pfaffing about it's sacredness and then demand violating that sacredness.
posted by symbioid at 12:33 PM on October 8, 2021 [1 favorite]
Before entering upon their duties and before receiving any salary, all officers and employees of the Postal Service shall take and subscribe the following oath or affirmation:
“I, ________, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter.”
Louis DeJoy took the oath of office as the nation’s 75th Postmaster General on June 16 (Postal Times, June 17, 2020); sole comment on article:
great. another plant guy. no idea how delivery actually works. hands in USPS pockets for 35 years. hit man.
posted by Iris Gambol at 12:43 PM on October 8, 2021 [2 favorites]
“I, ________, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter.”
Louis DeJoy took the oath of office as the nation’s 75th Postmaster General on June 16 (Postal Times, June 17, 2020); sole comment on article:
great. another plant guy. no idea how delivery actually works. hands in USPS pockets for 35 years. hit man.
posted by Iris Gambol at 12:43 PM on October 8, 2021 [2 favorites]
I think DeJoy is interested in money services because they're extremely profitable, and if the USPS can take a fraction of Walmart's business it'll offset all of its losses. And also there are plenty of oppos to dole out favors to political allies with all the services that need to be farmed out, and godknows what other shenanigans he has in mind, esp. around election time...
posted by RobotVoodooPower at 12:59 PM on October 8, 2021
posted by RobotVoodooPower at 12:59 PM on October 8, 2021
I think the problem is the USPS is running a front for a large private bank, NOT the USPS itself doing the banking. If USPS did the banking I think those of us complaining would actually be very approving, but based on what's going on, yeah, no ... kiosks that are designed to funnel money to a specific private entity (and one that isn't the US Government/fed/etc) ... is a problem.
But we all know running government like a business is THE problem.
posted by symbioid at 1:16 PM on October 8, 2021 [2 favorites]
But we all know running government like a business is THE problem.
posted by symbioid at 1:16 PM on October 8, 2021 [2 favorites]
Transfers between banks take one working day at most, with an instant clearing option that does have a fee. An exclusively online bank I use has been in operation since 2001.
It's perfectly possible to do that in the US, but many banks choose to be as slow about clearing transactions as the relevant regulations allow because it helps them manufacture overdraft fees. Said regulations have not been updated in a very long time.
Few if any banks clear paper checks the old way, instead converting them to an electronic ACH transaction, but a lot of them still won't credit an account with the deposit for the 3 or 7 days they are allowed. Never mind that they have the funds by the next day (and often the very same day) in almost all cases.
ACH, which is the primary means of electronic transfer aside from credit/debit/ATM interchanges, is a batch system. For a long time, transactions were only processed by the clearinghouse once per day, so next day transfers were the best possible without using more expensive means. These days, the clearinghouse runs batches something like six times a day, so transferring between two banks that give a shit about their customers can indeed be done the same day.
I really liked my old bank, even though it was owned by the Walton family. They did not have policies in place to try to generate unwarranted fees, and if you did incur a fee, it was much lower than anybody else's. When it came to things like transaction cutoff times and crediting deposits, they were nicer about it than they're written policies required. Too bad I moved and they didn't have robust enough online services to make it reasonable to go completely without access to a branch.
The reality of the situation is that the US banking system is perfectly capable of doing anything as well as anywhere else, it's just that most banks prefer to be shitty because not being shitty makes them less money. Not costs them more, mind, but reduces fee revenue from the people least able to afford being soaked.
posted by wierdo at 1:55 PM on October 8, 2021 [2 favorites]
It's perfectly possible to do that in the US, but many banks choose to be as slow about clearing transactions as the relevant regulations allow because it helps them manufacture overdraft fees. Said regulations have not been updated in a very long time.
Few if any banks clear paper checks the old way, instead converting them to an electronic ACH transaction, but a lot of them still won't credit an account with the deposit for the 3 or 7 days they are allowed. Never mind that they have the funds by the next day (and often the very same day) in almost all cases.
ACH, which is the primary means of electronic transfer aside from credit/debit/ATM interchanges, is a batch system. For a long time, transactions were only processed by the clearinghouse once per day, so next day transfers were the best possible without using more expensive means. These days, the clearinghouse runs batches something like six times a day, so transferring between two banks that give a shit about their customers can indeed be done the same day.
I really liked my old bank, even though it was owned by the Walton family. They did not have policies in place to try to generate unwarranted fees, and if you did incur a fee, it was much lower than anybody else's. When it came to things like transaction cutoff times and crediting deposits, they were nicer about it than they're written policies required. Too bad I moved and they didn't have robust enough online services to make it reasonable to go completely without access to a branch.
The reality of the situation is that the US banking system is perfectly capable of doing anything as well as anywhere else, it's just that most banks prefer to be shitty because not being shitty makes them less money. Not costs them more, mind, but reduces fee revenue from the people least able to afford being soaked.
posted by wierdo at 1:55 PM on October 8, 2021 [2 favorites]
Reminder that most postal service tampering is linked to union busting, and the USPS (600,000+ employees; in the US, only two private employers, Amazon and Walmart, employ more people) always operates at a loss because of its "pre-fund employee retirement appropriately" mandate, which includes providing for retiree health benefits:
The fundamental problem is that while the USPS generates enough revenue to cover its operating costs, its pension and retiree health care liabilities push its bottom line into the red. [...] Like many employers, the Postal Service provides pensions for its retired employees—and it is required, as private companies are, to set aside money from current income to cover its pension promises. In addition, USPS provides health benefits to its retirees, as other government employers—but not all large private employers—do. Unlike other employers, though, the USPS is required by the Postal Accountability and Enhancement Act (PAEA) of 2006 to pre-fund retiree health costs out of current income. (How is the U.S. Postal Service governed and funded?, Brookings Institute, Aug. 26, 2020)
U.S. Senate Majority Whip Dick Durbin (D-IL) Talks Postal Reform With Illinois Members Of The United Postmasters And Managers Of America (Postal Times, Oct. 6, 2021) During their conversation, Durbin received an update on postal operations in Chicago after months of delayed mail delivery on the Southside that led to more than 19,000 pieces of mail not being delivered during a single day despite being reported as delivered. The drop in on-time performance – including a 22 percent drop for three-to-five-day mail from last year- was due to United States Postal Service (USPS) Postmaster General Louis DeJoy’s disastrous operational plan that cut staff, removed sorting and processing capacity, and put an undue burden on letter carriers across the country. [...] Durbin and the postmasters also spoke about the Postal Service Reform Act, which would reform the Federal Employee Health Benefit Program to maximize postal participation in Medicare, repeal the retirement pre-funding mandate that currently costs the USPS $5.5 billion annually, and directs new spending in modernizing operations.
posted by Iris Gambol at 2:29 PM on October 8, 2021 [4 favorites]
The fundamental problem is that while the USPS generates enough revenue to cover its operating costs, its pension and retiree health care liabilities push its bottom line into the red. [...] Like many employers, the Postal Service provides pensions for its retired employees—and it is required, as private companies are, to set aside money from current income to cover its pension promises. In addition, USPS provides health benefits to its retirees, as other government employers—but not all large private employers—do. Unlike other employers, though, the USPS is required by the Postal Accountability and Enhancement Act (PAEA) of 2006 to pre-fund retiree health costs out of current income. (How is the U.S. Postal Service governed and funded?, Brookings Institute, Aug. 26, 2020)
U.S. Senate Majority Whip Dick Durbin (D-IL) Talks Postal Reform With Illinois Members Of The United Postmasters And Managers Of America (Postal Times, Oct. 6, 2021) During their conversation, Durbin received an update on postal operations in Chicago after months of delayed mail delivery on the Southside that led to more than 19,000 pieces of mail not being delivered during a single day despite being reported as delivered. The drop in on-time performance – including a 22 percent drop for three-to-five-day mail from last year- was due to United States Postal Service (USPS) Postmaster General Louis DeJoy’s disastrous operational plan that cut staff, removed sorting and processing capacity, and put an undue burden on letter carriers across the country. [...] Durbin and the postmasters also spoke about the Postal Service Reform Act, which would reform the Federal Employee Health Benefit Program to maximize postal participation in Medicare, repeal the retirement pre-funding mandate that currently costs the USPS $5.5 billion annually, and directs new spending in modernizing operations.
posted by Iris Gambol at 2:29 PM on October 8, 2021 [4 favorites]
USA, when was the last time you looked at how another advanced nation does things and thought: "Oo, that country has a simple, cheap, effective and technologically advanced way of managing domestic, retail and public financial transactions, let's follow them!"
This…is really not one of our strengths.
I completely agree, though. Having lived overseas in a few other countries, it’s so disappointing that a big chunk of the populace in the US seems to have an anaphylactic reaction to good ideas that originate beyond our shores.
posted by darkstar at 2:52 PM on October 8, 2021
This…is really not one of our strengths.
I completely agree, though. Having lived overseas in a few other countries, it’s so disappointing that a big chunk of the populace in the US seems to have an anaphylactic reaction to good ideas that originate beyond our shores.
posted by darkstar at 2:52 PM on October 8, 2021
Sen. Warren, 2014: The average underbanked family spends roughly the same amount on getting checks cashed, bills paid and the occasional short-term loan as they do on food for an entire year.
Prospect: The Union initially wanted the debit cards to be reloadable, but ultimately for the test pilot it was decided that they would stick with the single-use cards. The price point of $5.95 is also higher than the original concept, though that could be tweaked later.
Baradaran, the UC Irvine law professor/postal banking expert quoted in the article,"stressed the need for USPS to underprice Walmart on check cashing; currently the price point is roughly a little more for checks under $500. If that’s altered, she said, it could be a successful product." Walmart introduced its check-cashing service in 2004, and expanded it in 2011; the check cashing limit is $5,000 (increased to $7,500 from January to April of each year). Walmart fees are $4 for any checks up to $1,000. For checks between $1,001 and $5,000, the fee is $8. "Get your cash immediately" or "Load your money on a Walmart MoneyCard for extra convenience (reload fee is waived)." USPS check-cashing is not competitive; office location is the primary appeal.
The pilot program advertises cash loaded onto one of the single-use gift cards already sold at the post office; even in the article the customer chooses a debit Visa, because who throws a sub-$500 paycheck onto a Barnes & Noble or Bass Pro Shops gift card? Pre-paid single-use debit cards are not a good deal for consumers; for one thing, the cards are often lost or stolen (see also: gov't assistance via Visa debit cards). (Biden, formerly the senator from Delaware, has been too cozy with Big Credit for ages.) Banks criticize USPS experiment with banking services (Yahoo News reprint, Oct. 4, 2021) - concerned parties complain to a sympathetic Washington Examiner, if you're interested in some big-banking arguments against postal checking [an association's VP: "Why create a stripped-down kind of second banking system for poor people when the goal should be to get every American citizen into the traditional banking system?"].
posted by Iris Gambol at 3:34 PM on October 8, 2021 [3 favorites]
Prospect: The Union initially wanted the debit cards to be reloadable, but ultimately for the test pilot it was decided that they would stick with the single-use cards. The price point of $5.95 is also higher than the original concept, though that could be tweaked later.
Baradaran, the UC Irvine law professor/postal banking expert quoted in the article,"stressed the need for USPS to underprice Walmart on check cashing; currently the price point is roughly a little more for checks under $500. If that’s altered, she said, it could be a successful product." Walmart introduced its check-cashing service in 2004, and expanded it in 2011; the check cashing limit is $5,000 (increased to $7,500 from January to April of each year). Walmart fees are $4 for any checks up to $1,000. For checks between $1,001 and $5,000, the fee is $8. "Get your cash immediately" or "Load your money on a Walmart MoneyCard for extra convenience (reload fee is waived)." USPS check-cashing is not competitive; office location is the primary appeal.
The pilot program advertises cash loaded onto one of the single-use gift cards already sold at the post office; even in the article the customer chooses a debit Visa, because who throws a sub-$500 paycheck onto a Barnes & Noble or Bass Pro Shops gift card? Pre-paid single-use debit cards are not a good deal for consumers; for one thing, the cards are often lost or stolen (see also: gov't assistance via Visa debit cards). (Biden, formerly the senator from Delaware, has been too cozy with Big Credit for ages.) Banks criticize USPS experiment with banking services (Yahoo News reprint, Oct. 4, 2021) - concerned parties complain to a sympathetic Washington Examiner, if you're interested in some big-banking arguments against postal checking [an association's VP: "Why create a stripped-down kind of second banking system for poor people when the goal should be to get every American citizen into the traditional banking system?"].
posted by Iris Gambol at 3:34 PM on October 8, 2021 [3 favorites]
Oh, credit unions, too: Credit Union National Association [CUNA], Oct. 7, 2021: Postal banking pilot program brings ‘grave reservations’: CUNA wrote to leaders of the Senate Homeland Security and Government Affairs Committee, as well as the House Committee on Oversight and Reform on the program. “The current postal banking pilot program, located at four post offices on the East Coast, offers underbanked individuals with financial services that they could easily receive at credit unions,” the letter reads. "Further, credit unions can generally offer these services with more options to the consumer and also at a much lower cost.” [...] CUNA adds that these efforts are well beyond the USPS’s core competencies, and adding another layer raises several serious regulatory and consumer protection questions, and could leave consumers less protected than they would be at a regulated financial institution.
CUNA urged Congress to "take a more inclusive approach to credit union membership" rather than overburdening the USPS. As for the USPS, CUNA said it can further assist "financial services providers and consumers" by returning to "on-time delivery of first-class mail, as delayed mail leads to unpaid bills, late fees, adverse credit reporting, and other penalties." Shirty, that.
posted by Iris Gambol at 3:36 PM on October 8, 2021 [2 favorites]
CUNA urged Congress to "take a more inclusive approach to credit union membership" rather than overburdening the USPS. As for the USPS, CUNA said it can further assist "financial services providers and consumers" by returning to "on-time delivery of first-class mail, as delayed mail leads to unpaid bills, late fees, adverse credit reporting, and other penalties." Shirty, that.
posted by Iris Gambol at 3:36 PM on October 8, 2021 [2 favorites]
IDK - that "bankers association" : "Why do a stripped down banking service when everyone (even those poors) should have access to 'traditional' (read: OUR) service" kind of IS the point!
They are so so close. In fact, I'm quite sure they KNOW they're right on the (pardon the pun) money with it.
They just don't want the USPS to BE that service, because if they would they wouldn't argue against the project but for making it stronger...
And they got their corrupt buddies helping them help a noble goal fail and blaming the "socialists" who clamor for the noble goal for its failure. Almost like regulatory capture is a thing and they know how to play that game.
posted by symbioid at 4:12 PM on October 8, 2021 [1 favorite]
They are so so close. In fact, I'm quite sure they KNOW they're right on the (pardon the pun) money with it.
They just don't want the USPS to BE that service, because if they would they wouldn't argue against the project but for making it stronger...
And they got their corrupt buddies helping them help a noble goal fail and blaming the "socialists" who clamor for the noble goal for its failure. Almost like regulatory capture is a thing and they know how to play that game.
posted by symbioid at 4:12 PM on October 8, 2021 [1 favorite]
If banks really wanted "the poor's" business, they'd stop soaking them with overdraft and other fees: In 2019 Americans paid $11.68 billion in bank overdraft fees. Most of these fees (80%) were paid by just 9% of the customers, who are often the bank’s poorest, with balances of around $350 or less, according to the Center for Responsible Lending. Banks charged customers more than $12 billion in overdraft and related fees last year, according to the FinHealth Spend Report 2021.
posted by Iris Gambol at 4:39 PM on October 8, 2021 [6 favorites]
posted by Iris Gambol at 4:39 PM on October 8, 2021 [6 favorites]
They just don't want the USPS to BE that service, because if they would they wouldn't argue against the project but for making it stronger...
The people who tend to use the product that USPS is now selling are largely the same people whose custom the banks will not accept at any price. Being nonbanked is far more often an issue of not being able to get an account than being averse to using banks.
posted by wierdo at 9:05 PM on October 8, 2021 [3 favorites]
The people who tend to use the product that USPS is now selling are largely the same people whose custom the banks will not accept at any price. Being nonbanked is far more often an issue of not being able to get an account than being averse to using banks.
posted by wierdo at 9:05 PM on October 8, 2021 [3 favorites]
Only tangentially related but Patrick Mackenzie offers some insights in his newly launched newsletter Bits about Money. He portrays three business models in competition: "money center" banks that have national scope, community banks that focus on regional lending, and fintech firms hoping to strike it rich modernizing banking. It's a good read and having set the scene, I wouldn't be surprised if his followup newsletter covers the USPS effort.
Going back to a question upthread about the number of banks: Patrick mentions that the US has more banks than other countries, but doesn't explain why (the answer, as always, is federalism). As JPD alluded to, for most of the 20th century legislation constrained nationally chartered banks from competing against state chartered banks by doing business in multiple states. When this was repealed, it was part of a long decline in number of FDIC insured banks. To my eye, the US is simultaneously over and under banked: a lot of small banks which focus on local real estate development, and none that actively cater to the concerns of would-be small balance depositors (the unbanked).
If the USPS banking effort were well executed, it would probably not be an issue for the national banks; personal checking is seen as a loss leader. Goldman Sachs' retail banking subsidiary Marcus doesn't even bother with checking accounts, let alone debit cards.
posted by pwnguin at 2:44 AM on October 25, 2021 [1 favorite]
Going back to a question upthread about the number of banks: Patrick mentions that the US has more banks than other countries, but doesn't explain why (the answer, as always, is federalism). As JPD alluded to, for most of the 20th century legislation constrained nationally chartered banks from competing against state chartered banks by doing business in multiple states. When this was repealed, it was part of a long decline in number of FDIC insured banks. To my eye, the US is simultaneously over and under banked: a lot of small banks which focus on local real estate development, and none that actively cater to the concerns of would-be small balance depositors (the unbanked).
If the USPS banking effort were well executed, it would probably not be an issue for the national banks; personal checking is seen as a loss leader. Goldman Sachs' retail banking subsidiary Marcus doesn't even bother with checking accounts, let alone debit cards.
posted by pwnguin at 2:44 AM on October 25, 2021 [1 favorite]
that's true and its not true. While the provision of checking services is a loss leader, in a normal rate environment low cost deposits have value, and there is a very strong correlation between checking account and the ability to cross sell other services. Especially outside of the US the model is "Win Checking/Cash Management (which is a business banking thing)/Mortgage so you can sell the high ROE stuff" so the big banks will fight to defend checking relationships with customers they can cross sell. That's also why you see fintechs trying to sell bank-like deposit products without a banking charter.
posted by JPD at 8:52 AM on October 25, 2021
posted by JPD at 8:52 AM on October 25, 2021
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I'm in Japan and I've been using Japan Post as my main bank for the better part of the last decade, and it's great — pretty much by definition, you are never going to be that far from a post office, no matter where you go, so I'm very excited to see the USPS also trying this out too, particularly given the fact that, in poorer areas of the US, it should hopefully also provide a non-usurious alternative to check-cashing services
posted by DoctorFedora at 6:14 PM on October 7, 2021 [30 favorites]