Let the Post Office be a bank or whatever the market will bear

As Sen. Elizabeth Warren recently wrote:

If the Postal Service offered basic banking services -- nothing fancy, just basic bill paying, check cashing and small dollar loans -- then it could provide affordable financial services for underserved families, and, at the same time, shore up its own financial footing. 

No, this is not just a gimmick to shore up the Post Office's balance sheet, it's about serving underbanked and overcharged Americans, the Little Guys, the ones we're supposed to be worried about (and not the top 20, 10 or 1 percent).  Indeed, as Sen. Warren wrote, "The poor pay more," for basic financial services, which is not only unfair, it's avoidable [emphasis mine]:

According to a report put out this week by the Office of the Inspector General (OIG) of the U.S. Postal Service, about 68 million Americans -- more than a quarter of all households -- have no checking or savings account and are underserved by the banking system. Collectively, these households spent about $89 billion in 2012 on interest and fees for non-bank financial services like payday loans and check cashing, which works out to an average of $2,412 per household. That means the average underserved household spends roughly 10 percent of its annual income on interest and fees -- about the same amount they spend on food.

Back in 2011, I complained that Congress wouldn't let the USPS offer more innovative services to their clients, including banking.  Here we are in 2014, still discussing the same no-brainer idea that has worked in many other countries, including Japan. In fact the U.S. Postal Service had a banking system from 1910 to 1967 with deposits valued at about $30 billion in today's dollars... until Congress shut it down.  

Congress must stop micro-managing the Post Office and let it compete in new lines of business, while using its inherent advantages, such as convenient locations in thousands of small U.S. towns.  

Post Office Banking Could Be the Start of Something Big

By Richard (RJ) Eskrow

February 5, 2014 | Huffington Post

URL: http://huff.to/1ewCh2f

Justice Dept.: TBTF banks now 'Too Big To Jail'

This is an outrage. The Too Big To Fail banks are now also the Too Big To Jail banks, and that's the official word from America's top prosecutor, Attorney General Eric Holder:

"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large."

As Borsage notes, Attorney General Holder's statement renders bank supervision and regulation meaningless:

Holder's outrageous admission means that bankers operate -- and know they operate -- above the law. That renders all the argument about regulations and legal limits laughable. Bankers spend tens of millions lobbying to weaken regulations and starve regulators of authority and resources. But when the action gets hot, the bubble starts to inflate, the music keeps playing, they can trample the laws, mislead the regulators and defraud their customers, swathed in the confidence that the laws will not apply to them.

Meanwhile, Sen. Elizabeth Warren, creator of the Consumer Financial Protection Bureau, noted the hypocrisy of Too Big To Jail:

"If you're caught with an ounce of cocaine, the chances are good you're gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life. But evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your bed at night -- every single individual associated with this. And I think that's fundamentally wrong."

It's Official: Too Big to Fail Banks Are Too Big to Jail

By Robert L. Borosage

March 7, 2013 | Huffington Post

URL: http://huff.to/13Hlg0I

GAO: Cost of financial meltdown: $22 trillion

And, as Elizabeth Warren pointed out, nobody has gone to jail for it. Because it was caused by stupidity and greed.  I mean, it was the business cycle. No, wait, it was Fannie Mae and Freddie Mac! Yeah, that's the ticket....

Financial Crisis Cost Tops $22 Trillion, GAO Says

By Eleazar David Melendez

February 14, 2013 | Huffington Post

URL: http://huff.to/WsgcIk