Video: Elizabeth Warren makes the case for postal banking

At a one-day conference “exploring diverse perspectives on whether the USPS should offer financial services”, Senator Elizabeth Warren explained why the USPS should offer banking services

Click here for Darrell Issa’s comments at the conference. More archived video is available at the Pew Charitable Trust web site.

Read more: Financial Services and the Post Office.

  • jk2001

    There’s a problem with the initial analysis. One of many reasons why poor people don’t use banks is that they don’t get respect at banks. That’s the big thrust of the advertising for check cashing.

    The cost of check cashing is high, but so is the cost of regular retail banking, if you don’t have a buffer of around $1500 in your checking account (my experience). There are a number of different “free checking” accounts, but they aren’t really that free – there are fees for some services. Once you have a balance that’s pretty substantial, fees start to get waived.

    If you’re living check to check, and low on money, you’re likely to get hit with “surprise” fees from a traditional bank, while check cashing stores (and grocery stores that perform check cashing), will charge you up front. That’s generally better, imnsho.

    However, if you are making enough money to save up – then it makes sense to get a regular bank, because, before you get savings, you can build up a buffer in the checking account, and all the fees decline or vanish. (Just keep asking.) Then, as you build up savings and retirement, they’ll give all the services free, at least once a month. Obviously, the bank’s business model is to lend money or invest money, and to offer free checking as an inducement to get people to keep a pile of money in their account. If you don’t have the pile of money – the bank is not going to be making money off you. That will lead management and staff to consider you a bad customer to have.

    Warren has studied debt, and has a better handle on poverty than Clinton, but she’s not really understanding how people on the edge are living, and why they tend to use check cashing.