Senator Warren proposes replacing Payday Lenders with basic lending from the USPS

Via ThinkProgress

I've always maintained that the USPS is far underutilized for public policy purposes. For decades now they have been hamstrung by Fedex and UPS lobbyists and crony capitalist members of Congress who hate anything that remotely serves the public interest. They could be doing much more to bring down the cost of package delivery by directly competing with the for-profits UPS and FedEx. You don't have to be an econ PhD to realize that competition among only two private firms isn't likely to get prices anywhere near marginal cost. IMO package delivery, like health insurance or internet provision, is is a purely a middleman service that should cost productive firms as little as possible.

This new proposal to get the USPS into a basic system of payments/small lending role is interesting. Under-banking is a huge, yet under discussed issue in US public policy that, along with a million other things helps to exacerbate income inequality. A recent USPS report found that 68 million Americans don't have access to traditional checking/savings accounts, and instead rely on shady/predatory lenders to make ends meet. Things like account usage fees, minimum balances, and high overdraft fees have scared many low-income Americans out of traditional banking, and prepaid card dealers and predatory lenders have been filling the gap. This third-world style consumer finance drains nearly $90 billion a year of hard earned dollars from our fellow citizens who are already poor.

Allowing USPS to fill in this gap should be a no brainier, but the payday industry is notoriously nasty. In recent years, the industry has deployed  mafia-style, no holds barred campaigns against state-level initiatives to regulate payday, and I'm sure they won't let this initiative get too far either. This industry is also very fickle- most states that have tried to regulate payday have seen the industry get up and leave instead of complying with regulations and usury caps. If there is anyone in Washington who know how to fight these slimebags, it is Senator Warren....godspeed.