Read

Search form

The Warren Proposal: Postal Banking Is Key Financial Reform In the Public Good

The Warren Proposal: Postal Banking Is Key Financial Reform In the Public Good
Tue, 2/11/2014 - by Matt Stannard
This article originally appeared on Public Banking Institute

With around a billion people in countries from Japan to Bangladesh using their post office networks to save, send, and manage money, and up to 40 million Americans forced to pay extremely high rates for such services, we’re long past due for post office-based financial services for Americans.

In an editorial for Huffington Post, Senator Elizabeth Warren has proposed a plan for United States Post Office-based financial services including small savings accounts, debit cards, small-dollar loans, e-commerce payments, government-to-citizen payments, authentication, and financial counseling. Warren's proposal is based on the Office of Inspector General, United States Postal Service's January 27, 2014 report: "Providing Non-Bank Financial Services for the Underserved.", which notes that "Transparency and accountability over fees, processes, and other critical aspects of financial services help posts to make their offerings appeal to customers who might be wary of doing business with some traditional banks."

These services do not radically depart from the issuance of international money transfers and money orders. The services would save working people millions of dollars and provide consistency and day-to-day security for those currently underserved by banks. That's a good enough reason to support them – as is the way postal financial services offer alternatives to exploitative payday lenders.

The services Warren suggests are also important first steps in the ongoing process of democratizing our economy, building institutions that bypass big banks and unethical financiers, and preserve community commons. Those who are cautious about transitioning to public banking can support Warren's measure as an exploratory step, while those fully committed to a new economy can embrace it as an affirmation of policy makers' willingness to support public economic services.

Warren's proposal occurs in a context of state- and city-level efforts to create public banks in VermontPennsylvaniaWashington,California and other states. It also comes at a time when voices are rising in support of the postal service.

Warren has once again proven herself bold in comparison to many national elected officials. The absurd Postal Accountability and Enhancement Act and the the Carper-Coburn bill to eliminate services, combined with the suspicious selling off of postal properties, make Warren's advocacy particularly refreshing.

Post offices can do much more, of course. They do in Japan, where Japan Post Bank provides citizen banking and helps fund that nation's federal budget. We need to explore the potential of postal development banks. The National Association of Letter Carriers hasproposed a national infrastructure bank that issues bonds and guarantees long-term, low-interest loans to governments and small businesses – initially funded by citizen savings accounts through the United States Post Office.

The big banks are already attacking Warren's proposal. They are coming forward with the usual generalities: the government can't be in the financial business; the proposal would kill jobs; the post office is losing money. But the big banks' arguments are wrong and citizens of other countries know this; over 1 billion people worldwide utilize their nations' postal sectors for financial services. And more Americans are learning about the potential of financial service as public utility.

Americans see through the deliberately insolvent model imposed on the postal service by the Postal Accountability and Enhancement Act, and are tired of the self-justifying positions of the bank and payday lending lobbies. Advocates of postal financial services, and public banks, should answer those arguments head-on. The Public Banking Instituteprovides resources to do this, and advocates like Ellen Brown and Richard Eskow have amassed facts, figures and history demonstrating the viability of Senator Warren’s proposal.

There is a compelling case to leverage the vast post office network here in the United States. Post offices are placed where the people are, unlike banks, which are placed where the money is. Having a people-centered network of reasonably-priced financial services will go a long way towards bringing tens of millions of Americans into a stable and responsible financial system.

Senator Warren deserves credit and support for giving a boost to a great idea. Publicly accountable, accessible financial service makes good sense. Those wishing to learn more should read the Post Office Inspector General's report here.

Matt Stannard is Director of Media and Communications at the non-partisan Public Banking Institute.

Originally published by Public Banking Institute

Sign Up

Article Tabs

Twenty states, backed by Donald Trump’s Department of Justice, are trying in the courts to dismantle the law by attacking what they see as its Achilles heel: the individual mandate.

occupy, creative activism, activism, act out e165

A backlog that's symptomatic of a patriarchal system that not only devalues women but devalues survivors of sexual assault.

E.U. trade, U.S. trade war, aluminium tariffs, steel tariffs

“These tariffs aren’t even legal under U.S. law, let alone World Trade Organization laws. It seems rather odd to be citing national security and targeting countries including your closest allies.”

public banking, public banks, Bank of North Dakota, public financing, financing infrastructure, Wall Street influence, private-public investments

Private interests’ influence over banking consumes, rather than sustains, the public good.

Dodd-Frank act, Volcker Rule, bank deregulation, Wall Street lobby, proprietary trading, SEC

By revising the Volcker Rule, a centerpiece of the 2010 Dodd-Frank act, the feds are pushing financial regulation in a direction that should worry everyone.

The Trump administration has backtracked on its policy but offered no immediate plan for reuniting families. Photograph: Guillermo Arias/AFP/Getty Images

NGOs say bringing parents and children back together is an enormous puzzle with no clear system from the administration.

EPA, pollution deaths, pollution risks, Donald Trump, Scott Pruitt, respiratory illness

The authors used EPA’s own risk assessments to estimate the number of illnesses and early deaths prevented by clean air and water rules Trump is now trying to erase.

The Associated Press reports that young migrant children forcibly separated from their parents are being sent to facilities that critics described as "prisons for babies." (Photo: @NIJC/Twitter)

Those who have visited the facilites describe "play rooms of crying preschool-age children in crisis."

Twenty states, backed by Donald Trump’s Department of Justice, are trying in the courts to dismantle the law by attacking what they see as its Achilles heel: the individual mandate.

wage theft, corporate crimes, CEO pay,

An eye-opening new report has documented billions of dollars of corporate theft from workers. The government is turning a blind eye.

public banking, public banks, Bank of North Dakota, public financing, financing infrastructure, Wall Street influence, private-public investments

Private interests’ influence over banking consumes, rather than sustains, the public good.

Posted 5 days 16 hours ago
E.U. trade, U.S. trade war, aluminium tariffs, steel tariffs

“These tariffs aren’t even legal under U.S. law, let alone World Trade Organization laws. It seems rather odd to be citing national security and targeting countries including your closest allies.”

Posted 4 days 12 hours ago
U.S. Border Patrol agents take into custody a father and son from Honduras near the U.S.-Mexico border on June 12, 2018, near Mission, Texas. The asylum seekers were then sent to a processing center for possible separation. Photo: John Moore/Getty Images

A new report confirms that Trump and his advisers had been considering the brutal policy of separating migrant children from their parents at the border for as long as they’ve been in power.

Posted 5 days 17 hours ago
family separations, ICE, immigrant deportations,

The size and brutality of this particular raid in Ohio, along with the use of military tactics, have shocked even the most seasoned immigrants’ rights activists.

Posted 4 days 17 hours ago
occupy, creative activism, activism, act out e165

A backlog that's symptomatic of a patriarchal system that not only devalues women but devalues survivors of sexual assault.

Posted 3 days 10 hours ago
U.S. Border Patrol agents take into custody a father and son from Honduras near the U.S.-Mexico border on June 12, 2018, near Mission, Texas. The asylum seekers were then sent to a processing center for possible separation. Photo: John Moore/Getty Images

A new report confirms that Trump and his advisers had been considering the brutal policy of separating migrant children from their parents at the border for as long as they’ve been in power.

occupy, creative activism, activism, act out e165

A backlog that's symptomatic of a patriarchal system that not only devalues women but devalues survivors of sexual assault.

family separations, ICE, immigrant deportations,

The size and brutality of this particular raid in Ohio, along with the use of military tactics, have shocked even the most seasoned immigrants’ rights activists.

EPA, pollution deaths, pollution risks, Donald Trump, Scott Pruitt, respiratory illness

The authors used EPA’s own risk assessments to estimate the number of illnesses and early deaths prevented by clean air and water rules Trump is now trying to erase.

wage theft, corporate crimes, CEO pay,

An eye-opening new report has documented billions of dollars of corporate theft from workers. The government is turning a blind eye.