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Personally I think it's a bad idea. There's a reason banks have left low-income neighborhoods: It's a money-loser to operate there. Banking is so heavily regulated that it's expensive to operate a bank. USPS expects to profit off this in order to subsidize their losses on 1st class delivery? More likely they'll lose even more money on this. There's also tremendous investment they will need in order to convert their post offices into banks, like adding all the physical security measures.
The U.S. Postal Savings System was started by the Feds at the Post Office in 1910, specifically for poorer people who might not have trusted banks. They offered regular banking and certificates of deposit. They ceased operation in 1967 as regular banks had slowly begun offering a higher interest rate and due to the FDIC bank had the same safety backing as the post office accounts.
I know you could get U.S. Postal Money Orders for years after that.
I don't see any problem with bringing it back.
Editing to add re the profit: In the past, the Post Office would offer a certificate for, say, 2%, and then hold the money at a bank paying 2 1/2%, which is how they made their profit. I would assume that they would again combine the accounts to get a higher rate than the public could get and make money that way.
The U.S. Postal Savings System was started by the Feds at the Post Office in 1910, specifically for poorer people who might not have trusted banks. They offered regular banking and certificates of deposit. They ceased operation in 1967 as regular banks had slowly begun offering a higher interest rate and due to the FDIC bank had the same safety backing as the post office accounts.
I know you could get U.S. Postal Money Orders for years after that.
I don't see any problem with bringing it back.
Editing to add re the profit: In the past, the Post Office would offer a certificate for, say, 2%, and then hold the money at a bank paying 2 1/2%, which is how they made their profit. I would assume that they would again combine the accounts to get a higher rate than the public could get and make money that way.
If JP Morgan Chase and Wells Fargo, the two most financially successful banks in the US, are closing retail outlets because they are a money-losing venture, how do you expect the USPS to make this work?
JPM and Wells certainly have access to capital markets at the lowest rates you can get them (the Fed, 0.75%) and offer next to no interest in a savings account, and that spread is too tight for them to make retail banking work without heavy doses of automation (ATMs or online accounts)
If JP Morgan Chase and Wells Fargo, the two most financially successful banks in the US, are closing retail outlets because they are a money-losing venture, how do you expect the USPS to make this work?
When I'm at WalMart, I see people standing in line at Customer Service cashing their paychecks and getting a bunch of money orders to pay all their bills.
A LOT of people don't use regular banks for a variety of reasons. These were the people the government was trying to help back in 1910 and I think these are the same people they're talking about now. I remember reading something (regarding the old post office bank) about wanting to get people to get that money out from under their mattresses and get it deposited so the bank would have use of the float (if I'm explaining that correctly.) I wonder if this is pretty much the same thing.
I don't know about JP Morgan Chase, but Wells Fargo is doing quite well financially. I'd assume they're closing retail outlets because so many people--like me--do all their banking online and rarely visit a branch. Increasing their online and customer service people would be cheaper than maintaining a brick-and-morter.
When I'm at WalMart, I see people standing in line at Customer Service cashing their paychecks and getting a bunch of money orders to pay all their bills.
That doesn't mean much - I use money orders myself to pay the occasional odd bill that I can't pay online, because I no longer use paper checks. I pay everything online or with plastic, but the odd bill every now and then such as a doctor or dentist bill requires a mailed payment, and I find myself in line waiting for a money order.
If JP Morgan Chase and Wells Fargo, the two most financially successful banks in the US, are closing retail outlets because they are a money-losing venture, how do you expect the USPS to make this work?
I can't speak for other areas of the country, but here in CT, Chase is regularly opening new branches. For many years now, there have been 2 Chase branches that are within a quarter of a mile of each other in my town.
I trust the USPS more than Wall Street banks. Once the Fed crashes the dollar, who knows if postal money orders might have more value than Fed notes.
So when the government (FED) destroys the value of their paper currency (dollar), you'll trust the goverment (USPS) to issue you a form of paper payment (money order) valued in government paper currency (dollar)? I don't get it.
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