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Thread: Postal Banking.

  1. #1
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    Postal Banking.

    I was checking out this:

    http://www.vox.com/2014/9/24/6829335...azon-fedex-UPS

    Item 9 was interesting. It lead me to this:

    http://www.slate.com/articles/news_a...ork_again.html

    Do you think this is a bad idea, or a good idea? Would it just be leading us all to socialist serfdom, or would it help low-income people?

    From people who live in countries that have this, what do you know about it?

  2. #2
    Member El D.'s Avatar
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    So you're saying these loans are locked in at low interest rates, are easy to access, would generate a revenue stream for the USPS, and would put loan sharks out of business?

    Seems like a win-win-win to me.

  3. #3
    Senior Member Starjots's Avatar
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    Agree. The industry as it exists seems to serve a function but is predatory.

  4. #4
    a fool on a journey pensive_pilgrim's Avatar
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    I read the links but I don't get it. What's the big difference between postal banking and regular banks? Is it just that they're in a post office? Are they even in a post office?

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    Member El D.'s Avatar
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    Quote Originally Posted by Starjots View Post
    Agree. The industry as it exists seems to serve a function but that is predatory.
    yeah

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    Member Zephyrus's Avatar
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    There is nothing predatory about payday loans. Since they offer a service to people considered high-risk by other lending providers, it is only fair for them to be compensated for that risk. Moreover, because financial irresponsibility is generally the chief reason for taking out a payday loan, I see no reason why this issue even needs be addressed, especially by a tax-subsidized public service.

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    Quote Originally Posted by Zephyrus View Post
    There is nothing predatory about payday loans. Since they offer a service to people considered high-risk by other lending providers, it is only fair for them to be compensated for that risk. Moreover, because financial irresponsibility is generally the chief reason for taking out a payday loan, I see no reason why this issue even needs be addressed, especially by a tax-subsidized public service.
    Agreed. Risk is built into the interest rate.

    But perhaps this could be thought of as serving underfunded areas as a public service/development. Ghettos perpetuate ghettos. It may be more politically feasible to offer micro-loans to poor people than welfare/educational job training.

  8. #8
    a fool on a journey pensive_pilgrim's Avatar
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    Quote Originally Posted by Zephyrus View Post
    financial irresponsibility is generally the chief reason for taking out a payday loan
    *citation needed

    Really that statement just makes you look privileged and ignorant of how many people in this country work full time, live paycheck to paycheck and sometimes have unexpected expenses that they can't ignore - car repairs, medical emergencies, children and family-related emergencies, the list goes on.

  9. #9
    Senior Member Linnea's Avatar
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    Quote Originally Posted by Slab_Bulkhead View Post
    Do you think this is a bad idea, or a good idea? Would it just be leading us all to socialist serfdom, or would it help low-income people?

    From people who live in countries that have this, what do you know about it?
    In Finland the postal banking system was phased out in 2003 and this led to higher revenues for the Finnish Post. The postal banking system was a remnant that caused higher operating costs.

    It is a lot more difficult to handle bills if you don't have a bank account. You need a bank account for your salary. Social benefits are paid to your bank account too. Trying to operate on a cash system costs a lot more since you have to pay extra fees for every bill if you pay them in cash. And the only people who have trouble with getting a bank account are those who already have troubles with paying the bills and getting by.

    There should be affordable banking options for people with low incomes. Most banks here charge more if you have only a little money in the bank. You are rewarded with lower costs the more money (or loans) you have. The banks have been catering to rich people and have ignored the needs of low income people. Now the banks are scrambling a bit because S-group has been offering free banking services for the members of the cooperative since 2007. It's a bit like the postal banking system, except the banks are in stores instead of post offices, and the bank is owned by a cooperation not the state. Since the S-Group started offering banking services other banks have tried to produce an attractive option for lower income people but it's pretty hard to beat a free service (joining the cooperative has a fee that has to be paid within two years, but since there are no fees after that, it's cheaper in the long run.).

    The Finnish Post is trying to figure out how to make the postal system more profitable. At times they have been a bit too enthusiastic in trying to cut the costs. A while ago they heavily reduced personnel and then had the problem that they didn't have enough people to handle or deliver the post. They have suggested a model where post is not delivered everyday, which I have no problem with. There's also the option of choosing to have some bills and official documents delivered via the Internet rather than an actual letter. I receive some of my bills to my electronic mailbox and some straight to my Internet bank. I get almost no paper bills nowadays. And I can pick up most of my packages from a parcel terminal nearby. The Finnish Post is trying to automate everything they can and minimise the need for personnel.

    Quote Originally Posted by pathogenetic_peripatetic View Post
    *citation needed

    Really that statement just makes you look privileged and ignorant of how many people in this country work full time, live paycheck to paycheck and sometimes have unexpected expenses that they can't ignore - car repairs, medical emergencies, children and family-related emergencies, the list goes on.
    ^ This.

    In Finland the payday loans were deemed extremely predatory and are now more heavily regulated. Which led to a lot of whining from the companies offering them and a lot of them stopped their operations after the new laws came into force.

  10. #10
    Now we know... Asteroids Champion ACow's Avatar
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    I am confused as to the nature of this concept of a postal bank.

    Why is it cheaper than a regular bank? Is it because the government is providing the loans at a loss or at less profits? Is it that they think they can be more efficient than a private bank and thus offer lower rates? Is the implication that payday lenders are in a non-competative environment and capturing abnormal profits above the risk?

    Because all of those except perhaps the question of whether a government should provide financial services and loans at a loss for a public utility perspective seem questionable, and indeed...i might even say, what does any of that have to do with post offices?

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