AOC: We Should Have a Government Bank Run by the Post Office

As much as I think Alexandria Ocasio-Cortez is a nitwit, a Postal Banking system isn't that odd of a suggestion, mostly because we've actually had banking through the Post Office in the past.

The United States Postal Savings System was a postal savings system signed into law by President William Howard Taft and operated by the United States Post Office Department, predecessor of the United States Postal Service, from January 1, 1911 until July 1, 1967.

The system paid depositors 2 percent annual interest. Depositors in the system were initially limited to hold a balance of $500, but this was raised to $1,000 in 1916 and to $2,500 in 1918. At its peak in 1947, the system held almost $3.4 billion in deposits. The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because the establishment of the Federal Deposit Insurance Corporation gave a guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust. The rise of United States Savings Bonds during and after World War II also drew funds away from the Postal Savings System.

(Wikipedia: United States Postal Savings System)

It makes some degree of sense because the infrastructure is already there -- post offices all over the place, already staffed and so this would just be another service that they could offer without much expense. People who don't like or don't trust banks or don't have one convenient to them would have another option.

I'm sure that's not why she is suggesting it, of course, because she's not the sharpest knife in the drawer. For her, it's the first step on a path to get rid of banks and payday loan places.

a reply to: strongfp

CIAGypsy addressed the main problems with "unbanked" people on the 1st page.

1. Unbanked by choice. They will not put their money in ANY institution
2. Cannot or will not verify their identity.
3. Have serious liability issues due to habitual bounced/hot checks, credit issues, etc....

Although I don't remember having my credit checked to open my last account at a credit union, that could be something new. All I had to do was show up and fill out some forms and deposit a minimum balance, which for my credit union is $5 measly dollars that sits in a savings account linked to my checking.

a reply to: terrapincb

So she wants a tried and failed idea. Sounds about right.

originally posted by: OccamsRazor04
a reply to: terrapincb

So she wants a tried and failed idea. Sounds about right.

I believe it's called Socialism.

originally posted by: CIAGypsy
a reply to: thov420

I work with the banking industry at many levels. It has been my experience that the majority (not all) of the "unbanked" are either:

1. Unbanked by choice. They will not put their money in ANY institution
2. Cannot or will not verify their identity.
3. Have serious liability issues due to habitual bounced/hot checks, credit issues, etc....

Exactly there is always going to a segment of the population that will not bank their money, no matter what

I can just see a government bank or non-profit propped up and subsidized and ultimately failing.

a reply to: ketsuko
I would say she has a head on her like a house cat, but I don't want to insult the cat, so I think I will let Lurch express my sentiments for me...

Honestly not the worst idea in the world.

Seems to work pretty well in North Dakota.

a reply to: ketsuko

Well next she is coming for your garbage disposal!

originally posted by: ketsuko
Yep, you read right.

I guess it's my turn to post an AOC thread. She actually proposed this one video in a discussion of some sort with Bernie Sanders. The video is in the link.

"We should have a not-for-profit public option for basic banking services, and we should be piloting these projects through the U.S. Postal Service," Ocasio-Cortez said, apparently with no irony.

So I'm not sure what postal service AOC has dealt with, but it would have to get a whole lot better before I'd let it start banking.

Ok, so she's a little ignorant to the USPS who would operate the People's Bank of America being a freshman and all but, it's a good idea. Get rid of the apr interest bonuses of 0.01%* for checking and savings, remove the overdraft option period, and mail out a generic card like the EBT card. You'd have to pay ATM fees unless you goto WaWa (PNC bank) or the Govt. had some installed wherever.

*With one direct deposit per month and a minimum balance of $1,000.

I already have it but it doesn't count as a credited bank account, it's a virtual bank account. Bluebird American Express reloadable card. There's no loading fee, no fee for credit or debit, and no fee at 7-11's (Moneymart ATM) or WaWa. It has an account number and routing number.

Credited means it reports to credit agencies and you may have to pass a credit check to get it of course, and they can provide real banking services, issue loans of couse. However, if you're an average customer that doesn't want loans or banking services, it's all the same. It's not exactly fair that it isn't reported to credit. I had a place yesterday tell me over the phone that they couldn't accept my payment because it isn't from a credited bank account.

I have a lil feud going with the local PO. Just to say; they are lazy, like to blame others for their own ineptitude, LIE, obstruct govt services and generally act like spoiled children....perfect role model for AOC.

I just want my mail.

a reply to: r0xor


I think I agree with you in principle but just want to be clear.

0% interest on account balance, 0 overdraft protection, basically just a debit card linked to an account that has actual money in it? How is that different than the multiude of pre-loaded cards from Walmart etc? Is that really going to help the little "unbanked" people? Never used a pre-paid card like that but I can see the advantage for low income people. No fees and a card that can be used anywhere. Do you really think the USPS or government in general can do it cheaper than the existing for-profit companies?

a reply to: adjensen
Yes, the British had one too. I opened a Post Office Savings Bank account when i was eight. But the lady may be underestimating what would be required to create an account offering more than modest interest on savings. If the customers are given cheque-books, the bank will need to have a cheque-clearing centre. If they are going to set up payments by standing order or direct debit (or whatever they call these things in the U.S.), there would need to be centralised offices for that function. They can't do these things by local staff alone. Experienced staff would have to be found, and a central administration would have to be set up.

a reply to: ketsuko

Did...did the garbage disposal tell her to present this idea?

originally posted by: terrapincb
a reply to: ketsuko

Man you guys get so triggered by her. Go ask your parents and grandparents about the post office banks.

en.m.wikipedia.org...

I'm a grandparent. I remember them. They failed.


Kind regards,

bally

So let's keep aside the problems with any government-run enterprise.

Agreed. Uncle Sam tends to foul things up.

Why on earth would you have the USPS run it?

I don't know but that's a terrible idea. If anything, have the IRS run it, that's a better suggestion, my god what was she smoking on that day, because i want some.

So I'm not sure what postal service AOC has dealt with, but it would have to get a whole lot better before I'd let it start banking.

The UPS out here ain't bad at all. Stuff needs to get where it needs to when it suppose to. But i don't live in a city... love he country.

a reply to: DISRAELI

The interest on savings accounts, even money market accounts is purely psychological. Your return is hardly anything, maybe enough to get a happy meal once a year for the average person. You can have $100,000 in regular savings and it still brings back nada.

I had a money market account with 40k in it. Wanna know how much I'd get in interest each month? $40. That's getting to the beginning of being worth the trouble, and for that you lose federal insurance protection on your money over approx $250k to get that. Also, limited to 5 purchases or withdrawals/transfers to checking per month or else a $15 fee gobbling up most or all of your interest that month.

Believe it or not if you're new to having a chunk of money and/or you have a lot you need to spend it on in an unplanned or sporadic come and go financially chaotic period of time due to unforeseen events like the death of the lease holder of the house, a relative with bills and an unknown amount of existing debts popping up in the mail, those 5 transfers to checking can be necessary if you're trying to be fiscally conservative.

You need a CD account which is a certified check of deposit account for any interest to be meaningful. Those can get you say $60-$70 a month with $40k but you have to goto the bank and meet with a banker to withdrawal or transfer funds and the number of times allowed is much less, looked down upon thus can be embarassing, and the penalties for doing so are greater, you can lose the account easily.

a reply to: r0xor
Yes, I did say the interest was "modest". The British savings banks go back to Gladstone's time, at least, and were originally designed to encourage the poorer classes to save any money at all, instead of spending it as they went along and leaving nothing for their old age.

a reply to: ketsuko

Yeah, and we can put the Dept of Education in charge of Trash Pickup, make everyone travel to the center of the nearest National Park to renew their drivers license, and have all judges replaced by scientists, cause everyone knows theyre smart!


Oh, I forgot... We are talking about her so that somehow means we are the losers and she is winning... IF you have your brain installed upside down and backwards like our poor beleaguered Lefties.

Anymore, when she speaks I just roll my eyes, sigh, and move on with a shake of my head.

a reply to: thov420

There are so many options online and with debit cards that absolutely no one should not have banking services that want them. They have already established services for low income and underserved folks. Things like the Rush Card.