• Monthly
  • $25
  • $50
  • $100
  • $other
  • use PayPal

ONE WEEK TO DOUBLE YOUR DONATION!

A generous supporter has offered a $25,000 matching grant. So for this week only, whatever you can donate will be doubled up to $25,000! If you have the means, please donate! If you already have done so, thank you for your support. All contributions are tax-deductible.
FacebookTwitterRedditEmail

Sick of Shady Banks? Get a Loan from the Post Office!

Millions of Americans live in “banking deserts,” without adequate access to brick and mortar banks and the services they provide. Rural and poor communities, where local banks left town thanks to the recession or the big banks buying them out, are especially affected.

Often it’s risky payday lenders who come along to fill the void.

They exploit America’s 88 million “underbanked” people, making ridiculous profits by charging sky-high interest rates on people just trying to survive paycheck to paycheck.

In some places, annual interest rates for these lenders average over 500 percent. That badly hamstrings low-income people with fees and interest payments, all because they lack simple banking services.

The practice is especially predatory toward people of color. The recession shuttered around half of all black-owned banks, leaving black Americans over 100 percent more likely to use a payday lending service than white people, according to a Pew Charitable Trust survey.

But the problem is also rampant in white, Hispanic, and Native rural communities. The National Community Reinvestment Coalition estimates that most of the over 6,000 bank branches closed between 2008 and 2016 were in rural areas.

It’s despicable, and it needs to change.

One solution could come from your friendly neighborhood Post Office. What if you could get a low-interest loan there, rather than an extortionate payday loan from a for-profit payday loan company?

Postal banking used to be widespread. Now it could be coming back.

New York Senator Kirsten Gillibrand recently announced a bill to reintroduce the practice, aiming to put the Post Offices scattered throughout the country for a broader use: providing banking to the unbanked. The bill would allow postal banks to make loans of up to $1,000 at low interest rates, cash people’s paychecks free of charge, and provide other basic services such as checking accounts.

The idea, long touted by progressive senators Bernie Sanders and Elizabeth Warrenand many local activists, would give millions of Americans a service long excluded from their communities. It’s “a solution to take on payday lenders, to take on the problems that the unbanked have all across the country,” Gillibrand has said.

It would also tackle the banking industry writ large.

Big banks often refuse to open branches in poor or minority areas, and the few banks still around shutter thanks to industry consolidation and online banking. None of this is due to a lack of profits or money — banks are saving billions thanks to the Republican tax reform. Instead, it’s a larger, conscious choice by these banks.

Postal banking would provide essential banking services throughout these banking deserts, reaching out to people who struggle to make it day-to-day without something as mundane as a debit card.

It also provides an alternative to the shady tactics used by banks to lure in customers and make record profits. Wells Fargo famously encouraged employees to open up false accounts in their customers’ names to boost the corporate bottom line. Major banks have also helped payday lenders siphon money out of customers’ accounts automatically, so the lenders can get their own payday.

And, of course, predatory banking practices were one of the catalysts of the financial crisis.

Americans deserve better options than banking with these wolfish institutions. Getting trapped in a payday loan cycle badly hurts their ability to get past living paycheck-to-paycheck. An opportunity to break that cycle is badly needed.

Postal banking would succeed in fracturing an industry that works so hard to keep on exploiting hardworking Americans. It would also help under-served communities get on their feet. Who doesn’t want that?

Brian Wakamo is a Next Leader on the Global Economy Project at the Institute for Policy Studies.

More articles by:
bernie-the-sandernistas-cover-344x550
October 15, 2019
Victor Grossman
The Berlin Wall, Thirty Years Later
Raouf Halaby
Kurdish Massacres: One of Britain’s Many Original Sins
Robert Fisk
Trump and Erdogan have Much in Common – and the Kurds will be the Tragic Victims of Their Idiocy
Ron Jacobs
Betrayal in the Levant
Wilma Salgado
Ecuador: Lenin Moreno’s Government Sacrifices the Poor to Satisfy the IMF
Ralph Nader
The Congress Has to Draw the Line
William A. Cohn
The Don Fought the Law…
John W. Whitehead
One Man Against the Monster: John Lennon vs. the Deep State
Lara Merling – Leo Baunach
Sovereign Debt Restructuring: Not Falling Prey to Vultures
Norman Solomon
The More Joe Biden Stumbles, the More Corporate Democrats Freak Out
Jim Britell
The Problem With Partnerships and Roundtables
Howard Lisnoff
More Incitement to Violence by Trump’s Fellow Travelers
Binoy Kampmark
University Woes: the Managerial Class Gets Uppity
Joe Emersberger
Media Smears, Political Persecution Set the Stage for Austerity and the Backlash Against It in Ecuador
Thomas Mountain
Ethiopia’s Abiy Ahmed Wins Nobel Peace Prize, But It Takes Two to Make Peace
Wim Laven
Citizens Must Remove Trump From Office
October 14, 2019
Ann Robertson - Bill Leumer
Class Struggle is Still the Issue
Mike Miller
Global Climate Strike: From Protest To Power?
Patrick Cockburn
As Turkey Prepares to Slice Through Syria, the US has Cleared a New Breeding Ground for Isis
John Feffer
Trump’s Undeclared State of Emergency
Dean Baker
The Economics and Politics of Financial Transactions Taxes and Wealth Taxes
Jonah Raskin
What Evil Empire?
Nino Pagliccia
The Apotheosis of Emperors
Evaggelos Vallianatos
A Passion for Writing
Basav Sen
The Oil Despots
Brett Wilkins
‘No Friend But the Mountains’: A History of US Betrayal of the Kurds
John Kendall Hawkins
Assange: Enema of the State
Scott Owen
Truth, Justice and Life
Thomas Knapp
“The Grid” is the Problem, Not the Solution
Rob Kall
Republicans Are Going to Remove Trump Soon
Cesar Chelala
Lebanon, Dreamland
Weekend Edition
October 11, 2019
Friday - Sunday
Becky Grant
CounterPunch in Peril?
Anthony DiMaggio
Fake News in Trump’s America
Andrew Levine
Trump’s End Days
Jeffrey St. Clair
High Plains Grifter: the Life and Crimes of George W. Bush
Patrick Cockburn
Kurdish Fighters Always Feared Trump Would be a Treacherous Ally
Paul Street
On the TrumpenLeft and False Equivalence
Dave Lindorff
Sure Trump is ‘Betraying the Kurds!’ But What’s New about That?
Rob Urie
Democrats Impeach Joe Biden, Fiddle as the Planet Burns
Sam Pizzigati
Inequality is Literally Killing Us
Jill Richardson
What Life on the Margins Feels Like
Mitchell Zimmerman
IMPOTUS: Droit de seigneur at Mar-a-Lago
Robert Hunziker
Methane SOS
Lawrence Davidson
Donald Trump, the Christian Warrior
William Hartung – Mandy Smithburger
The Pentagon is Pledging to Reform Itself, Again. It Won’t.
FacebookTwitterRedditEmail