Elizabeth Warren: Let’s Have Bankrupt Post Office Lend Billions to People With Bad Credit

Daniel Greenfield, a Shillman Journalism Fellow at the Freedom Center, is a New York writer focusing on radical Islam. He is completing a book on the international challenges America faces in the 21st century.


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“It can’t miss Jerry. Can’t miss.”

Why not turn an organization that can’t figure out how to make money into a bank?

The Post Office can’t pay its bills by delivering the mail. Surely it can make money lending money to people who can’t pay it back.

This brilliant can’t fail scheme comes from the mind of the Post Office Inspector General and Elizabeth Warren. It was said of Napoleon III that insane schemes multiplied in his brain faster than rabbits. I don’t even want to picture what the inside of Elizabeth Warren’s brain looks like.

As the U.S. Postal Service continues to lose money each year, a new report suggests a way to add to its bottom line: offer banklike services, such as a check cashing card that would allow holders to make purchases and pay bills online or even take out small loans. The idea is to provide services that are now unavailable in many communities.

Sure the USPS can’t figure out how to make money on its core function, so why not have it branch out into a risky and complicated line of work that it has no experience with.

It can’t miss.

But at least the Post Office will be targeting profitable sectors where it will make money? Oh right, of course not.

More than a quarter of all Americans, some 68 million, are now underserved by banks — “underbanked,” as the white paper from the Inspector General of the U.S. Postal Service calls them. They live in places where there are no bank branches, or just one. Many have to rely on check cashing outlets and payday loans, which often charge exorbitant fees.

Betsy Cavendish, president of Appleseed Network, says being able to go to the post office for simple financial transactions would be “win-win. Many people are spending $2,500 a year or so in extra fees.”

“They have a lack of options for small-dollar loans and too few savings vehicles. Meanwhile, the Postal Service is in every zip code in the country and could potentially offer needed financial services,” she says.

It’s a win for the people who will get cheap loans from the Post Office, it won’t be a win for the taxpayers or the Post Office.

If banks could make money in those sectors, they would. It would be a lot smarter in those cases for the Post Office to partner with banks, instead of diving into an area it doesn’t have any experience with. In some cases, the infrastructure of the Post Office might be enough to turn some kind of profit, but we’re talking about low margins or an actual bank would be there.

Also physical bank branches are probably going to disappear in two decades so the Post Office is jumping aboard another dead end that’s going to be wiped out by the internet.

But Elizabeth Warren thinks this is a great idea.

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.

It might not be a bad idea to have the Post Office provide bill paying and check cashing services, but once it gets into lending, it’s going down a bad road.

Payday lenders are a major problem, but there’s also a reason they exist. To undercut them, the Post Office would have to take on risky loans with little protection and that would wipe out whatever profits it picks up putting it and us deeper in the hole.

The IG’s report suggests, “The Postal Service has a tremendous opportunity to offer small loans that could save borrowers a lot of money — billions of dollars when aggregated across all potential users.”

A Postal Service that is billions in the hole will lend out billions more to people with bad credit ratings to get out of debt.

How can this amazing plan possibly fail to bail out the Post Office?

  • truebearing

    Why not have the Post Office deliver babies, too? They already have experience delivering things and rural hospitals are failing, especially now that Obamacare is in effect. The feds could force any doctor who quits practicing to work for the Post Office, delivering mail and babies.

    • truebearing

      Don’t be ridiculous, truebearing. You can’t crumple, twist, cram, or bend babies!

      What the Post Ofiice should be doing is providing soalr systems for the poor and jobless. Then they could afford electricity!

      • Digli

        A Solar System for the poor and jobless?
        What a great idea.
        They could all move there and leave the Earth to the rest of us.

    • Gee
  • Michael Gersh

    They already did this, from 1911 to 1966. It failed then for the same reason it would fail now – business can do what government can not do, or if they can do it with some success business will come in and out compete them.

    http://www.postalmuseum.si.edu/museum/1d_postalsavings.html

    • Marie Marr

      The private sector fails sometimes (e.g. the 2008 economic collapse and bailout of Wall Street). And the Government doesn’t always fail at things. Look at our Government-run military—-the greatest in the world. You have black and white thinking.

      • alericKong

        Corrupt Democratic Senators created the crisis by hiding fraud at Fannie Mae and Freddie Mac, government sponsored entities. Money printing at the federal reserve steals our savings and false “growth” which is really use debt to fund the of squandering much needed resources for mere consumption.

        The Americans serving in the US military make it the greatest in the world. The bureaucracy behind it often wastes their lives and screws them over when they come home just for another extension on a moronically designed logistics system or green energy scheme grafted by some scumbag political crony.

      • Daniel Greenfield

        The military is not all that well run. It just has brave men on the front line. And the economic collapse had quite a lot to do with the government.

  • Hard Little Machine

    USPS pay day and title loans? Sounds so ghetto it would fly.

  • Franklins Legacy

    The post office is an example of a Government entity who’s purpose has diminished to the point of irreverence. Rather than be closed like an obsolete business (think chariot makers), it remains functioning as a giant Democratic jobs program. Its sole purpose is to fund retired postal workers under the guise of delivering millions (if not billions) of tons of paper that are thrown away immediately. Think of the energy costs to create, deliver and dispose of junk mail. Think of the expense of maintaining the postal service to deliver it to you.

    If Democrats really wanted to reduce waste and help the environment, changing and reducing the postal service would be a great start.

    • Marie Marr

      OK. Get rid of the US Post Office, then let’s just wait and see businesses start complaining about the expensive and unreliable delivery services in the private sector (UPS, FedEx), that take forever to get a package delivered cross country, and charge you a fortune. You moron.

      • Michael Gersh

        You’re joking, right?

        • objectivefactsmatter

          Leftists create constant stream of unintentional comedy.

      • objectivefactsmatter

        “You moron.”

        What would that make you?

      • Daniel Greenfield

        I doubt businesses would complain, but people in rural areas would be cut off.

  • Yulia Demkin

    Payday loans seem high when compared to other loans because the transaction costs must be born by small loan amounts as well as the borrower’s often bad credit history.

    The bottom line is payday loan companies are profitable, but not wildly so.

    • 1stworlder

      I remember hearing from an Affirmative action American co worker about how he got “jewed”. He took out a pay day loan and had to pay back an incredible amount. So I asked a few questions and it turned out he didn’t have enough in the bank at payday for the loan to be paid off. He had taken the money out to buy something for his girl, and didn’t even have enough money in his account the next pay day for it. I asked him if he had the exact amount in the bank for the loan company what would he do to impress his girl for the next 2 weeks.

  • alericKong

    Instead of lobbying for an ATM which cashes checks and pays bills, which a bank will install for free, let’s launch a billion dollar government program with century old technology. Wonderful.

    Warren’s jealous. She could never make it as an investment banker or
    Wall Street lawyer, and now she wants all that money for herself.

  • Fritz

    Why not just allow USPS to use some of its copious and expensive real estate to get revenue by renting space to those who provide those services, and already know how? Like having a bank branch in the supermarket, etc.

    • objectivefactsmatter

      Because that’s so capitalistic.

  • jb willikers

    Wow. This is right out of the Onion world.

  • Digli

    Lets all go and live in a land of chocolate and candy and fairies and elves
    and Ms. Warren can be our fairy Princess.

  • Lanna

    Crazy people do crazy things. All we see Is Lunacy from the left!

  • mikeman

    Another dumb idea by a dishonest democrat from a state known for stupid, dishonest democrats. I won’t be surprised if the obamaistas pick up on this and expand the p.o. into car loans, insurance, and maybe a homeless shelter. Of course only minorities, felons, party members and muslim brotherhood types could work at the new p.o. Can’t have any white people trying to stop all the stealing going on now could we Elizabeth?
    Libtards love stupid ideas, that don’t work, and waste money. Watch the democrats and their media cheer for this one.

  • objectivefactsmatter

    For all intents and purposes, this is the unsecured loan version of what caused the previous banking problems related to toxic home (secured) loans.

  • dchrist81

    The same crazy leftist hack demanding that banks do not cause another credit crisis wants to empower an insolvent government agency to cause a credit crisis.