Brains Lost in Mail -- Postal Bank Bunkum
By Greg Palast, Reader Supported NewsThis piece first appeared at Reader Supported News.On the Internet, no one can hear you scream (unless I attach one of those idiot emoticons).
Since my first report in this investigation, I have had to resign a column – and endure several thousand tweets by enraged Liberals – simply for trying to expose the Postal Service’s whacky scheme to transform itself into a criminal loan-sharking operation tied to a shady escort service. (This last is a wee exaggerated, but not much.)
The story “Liz Warren Goes Postal” was originally submitted for my regular column at another news site – which refused to print my findings because it did not comport with their political “mission.”
I resigned from that publication, of course. No reporter worth his pencil will take the missionary position with editors. I’m sure my superiors at The Guardian and BBC Television would also love to bend me over their ideological mattresses – but wouldn’t dare suggest it.
As a card-carrying progressive, I’m told I must never write about Senator Elizabeth Warren unless I first shout, “Warren akbar!” – Liz is Great! – while bowing reverentially towards Boston.
So, bless Reader Supported News for publishing the story in its uncensored form, though its editors may not warm to my message. I was well warned that, for reporting facts that do not build the edifice of adulation to Saint Elizabeth, I would endure the slings, arrows, and fervent tweets of outraged Democrats. Indeed, the sonic blast of their chirping has been deafening.
What, you are asking, could cause such a freak-out among my erstwhile comrades? Mass-murder in Syria? ObamaCare melting the Polar Caps?
Wrong! The Post Office.
A couple of news cycles ago, Senator Elizabeth Warren endorsed a U.S. Postal Service scheme to allow post offices in low-income neighborhoods to get into the “payday loan” business.
Payday loans, like rats and cops with tasers, are a fact of ghetto life. The desperate poor sign over their paychecks in advance to some sleazy loan-shark who charges “vigorish” (interest) that can eat a third of the paycheck. It’s sickening – and in several states, it’s a crime.
But crime pays: The Post Office projects it can suck $8.9 billion a year from America’s poorest if they can just get into this payday loan racket.
America’s big banks also lust for a payday pound of flesh. But they are barred from this kind of sick-o predatory lending by the federal consumer protection regulations promoted by … Liz Warren.
Yet, under a new Post Office plan endorsed by this same Liz Warren, the P.O. would team up with commercial banks to cash in on payday predation, exempting themselves from the Warren rules.
Are you confused? Surely the senator is.
Why would Warren add her name to such a mean scheme? I can only guess – because last week her PR flack said he’d get right back to me within a day with a time to interview her. A week has now passed; I guess he’s misplaced the senator.
A Non-Bank Bank
Neither the Post Office nor the Big Banksters would ever say, “We want to use federal property to run illegal loan-sharking shops.” No, instead, the Postal Governors are running a slick, slick campaign, telling us, in the opening of their plan, that the Postal Service just wants to help out the “one in four U.S. households [living] at least partially outside the financial mainstream without bank accounts or using costly services like payday lenders.”
The P.O. is right: there are 68 million “un-banked” Americans. But the Post Office plan won’t reduce that number at all. Quite the opposite: The Postal Governors, pimping themselves out in anticipation of privatization, see America’s vulnerable un-banked as their “single best new opportunity for posts to earn additional revenue.”
And the USPS plan makes clear, in black and white, that it will not offer banking services: no bank accounts, neither checking nor savings – and no lending except sharky payday loans.
Nevertheless, Senator Warren and several good and decent folk – based on Warren’s endorsement – are now campaigning for “Postal Banking.”
I invite your disagreement, but have no time for Twit-iots who attack my findings without having read the farking postal service plan. Here’s the link, friends.
The horror of the Post Office scheme is right on the cover, right in its title: “Providing NON-BANK Financial Services to the Underserved.”
I’ve included an illustration for the illiterate.
Now what the hell is a “non-bank?” It’s the same old ghetto banking system – except that you can lick the back of it.
When you read through the P.O.’s putrid plan, in pages past the crocodile tears for the poor, it tells us, “Listen up, you poor schmucks – you don’t have a bank and you ain’t getting no bank. All we’ll give you are more payday loans, high-fee pre-paid credit cards and rip-off money transfers.”
Liz Warren endorsed a plan for Postal Banking – which, in fact, is nowhere in the actual Postal plan. A real bank provides savings and checking accounts, credit cards (not “prepaid” cards) and real loans (not “we-hold-your-paycheck-and-charge-34%” loans). The USPS will offer only the costly rip-offs that Liz Warren spent years fighting.BitCoin Banking and BitNews Reporting
Last week, when I noted that the Empress has no clothes on this issue, I was viciously tweeted upon.
One truly decent activist for the un-banked poor had written a column backing the USPS/Warren ghetto plan – and then slapped me for failing to join the party.
I was ready to concede I’d gotten it wrong: I don’t believe in the doctrine of Journalist Infallibility. So I wrote this thoughtful author (the name is not important) about her knowledge of the details of the Post Office plan. And I got this reply:
“No, I hadn’t read the bill. Drowning in work at the moment, but I’ll get to it.”
I’ve been busy working too: reading the plan.
Such a snap commentary, the staple of U.S. news outlets, is what I call BitNews. Like BitCoin, it’s imaginary, without any back-up, but you’re expected to buy it. (The image came to me after reading the P.O.’s additional request for authority to set up accounts for BitCoins – but not US currency. I can’t make this up.)
I am an investigative reporter. Sometimes that means hiding in the snow at dawn outside some finance vulture’s mansion; or taking a dug-out canoe up the Amazon hunting for evidence. Sometimes, it’s just reading a law before I write about it.
That’s what is happening here. My progressive friends, and, I suspect, Senator Warren, have decided to review a movie without seeing it.
Oh, yes, they’ve seen the trailer. The “trailer” to the USPS scheme was an op-ed in The New York Times by one Mehrsa Baradaran, called “The Post Office Banks on the Poor.”
It’s a terrific piece. But it’s a lie.
It’s a lie because of what it leaves out: that the Post Office will provide nothing but the degraded ghetto “services” already available from a guy in the back room of the corner bodega.
And it’s a lie because the bio of Ms. Baradaran leaves out something crucial. She’s listed as a “professor of law specializing in banking regulation.” But until recently, Ms. Baradaran worked for Davis, Polk & Wardwell. Davis Polk represents the Securities Industry & Financial Market Association and Wells Fargo, the firm’s biggest lobby clients. Baradaran’s firm fought tooth and nail against Liz Warren’s banking regulation proposals.
The banksters must have broken out the champagne when they heard they’d hooked Senator Warren.
But this story is not about Liz Warren, nor Greg Palast for that matter. This is about an assault on the nation’s least-defended Americans.
Happily, there is an alternative to Postal predation.
Occupy Wall Street’s Solution
If you’re like me, nostalgic for the good old days of 2011, you’ll remember a movement called “Occupy Wall Street.”
“Occupy” (acolytes only use its first name) called for taking your money out of the Big Banks and sticking it into the not-for-profit banks known as community credit unions.
Occupy itself stuck its buckets of cash donations into New York’s Lower East Side Peoples Federal Credit Union. (See my report for Democracy Now, Goldman Sachs Versus Occupy Wall Street.)
Occupy’s bank, “Peoples,” provides short-term loans (not payday loans) to their members, 80% of whom are near or below the poverty line. The loans cost 10%, not the 34% sought by the PO. They offer real savings and checking accounts, even to the homeless.
There are about a thousand of these community credit unions nationwide. But there should be 25,000.
Are you reading this, Senator? The Post Office has already begun what it calls a “market test” with American Express.
Instead of letting American Express run tests on us, Senator, why not let post offices partner with not-for-profit credit unions to offer real banking services, not usury, to the public?
Postmen to Bagmen?
There’s another issue thrown into this witchy cauldron. Lots of progressives applaud the Postal payday loans because it will keep the USPS out of bankruptcy. But if it’s okay to skin the poor to save the P.O., why stop with ghetto “banking” and BitCoins? Why not let postmen sell cigarettes, forties, spliffs and escort services? These too are overpriced in low-income neighborhoods.
Despite what I read about myself on the Internet, I like Postal Banking – just like they have in Switzerland. My family likes postal banking. In fact, my relations like postal banking so much, they’ve put all their savings into Postal Bank accounts in Switzerland (they’re Swiss).
So, there you have it: The story of the U.S. Postal Bank that doesn’t exist, of lobbyists hoodwinking the best of us when we’re “busy,” my resignation from yet another publication, and my commitment to you that you will never read here some propaganda for someone’s “mission.”
You only get the story ordered by my favorite editor, Sgt. Joe Friday: “Just the facts, ma’am.”
Greg Palast is an investigator of financial and corporate fraud who has never lobbied for the banking industry. His latest investigations for BBC Television and Democracy Now have been released as a full-length film, Vultures and Vote Rustlers, available from the not-for-profit Palast Investigative Fund.
Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.