Friend of the blog Troy Jones says that until Steve Hickey, Steve Hildebrand, and the rest of us who support the real 36% rate cap on payday loans can offer an alternative that gives the working poor access to emergency cash, he deems the 36% petition and its supporters “anti-poor“:
…[T]he proposal is worse than the disease. Access to capital is a path to a better future for those who use it correctly. When Thoreau wrote Walden, people lived in log homes (or easily could have), could walk to their work, and knew every one of their neighbors. Today, the choice is a house, apartment or trailer house, for most a car is a necessity, and we are strangers to the person who lives next to us. To pretend this isn’t true and we can take away paths to people who already have too few paths (limited greatly because economic growth is at best anemic) is more than poor policy to me. I find it harmful to those intended to be helped, regardless to good intentions. But, I also believe there is a better way that throw out the dirty bath water but keeps the baby [Troy Jones, comment, Dakota Free Press, 2015.10.20].
Perhaps Bernie Sanders can save that baby. Eager reader Jerry (I learn so much from my commenters!) sent me this article recently which discusses the Vermont Senator and Presidential candidate’s support for turning post offices into banks:
Q: …you believe in postal banking?
Sanders: Yeah, I think that’s a great idea. In fact, I just spoke to a postal union this morning. I want to see our post office be reinvigorated. And one of the ways that I think we can help not only the U.S. Postal Service, but help a lot of low-income people—if you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it [Bernie Sanders, interview with Felix Salmon, Fusion, 2015.10.20].
Almost everybody else is doing it…
In fact, Sanders’s idea is quite sensible. “Postal banking”—which just means that post offices run savings accounts, cash checks, and perform other basic financial services—is common in most of Asia and Europe, and only about 7 percent of the world’s national postal systems don’t offer some bank-like services. Postal banking is a really good way to reach people who haven’t had access to standard savings accounts. One estimate figures that more than 1 billion people have used post offices for making deposits [Joe Pinsker, “Bernie Sanders’s Highly Sensible Plan to Turn Post Offices into Banks,” The Atlantic, 2015.10.20].
…so why can’t we?
The reason why this would be so useful in the U.S. is that somewhere between 20 and 40 percent of the population has to rely on check-cashing or payday-lending services, which in some places charge usurious rates that send people into spirals of recurring debt [Pinsker, 2015.10.20].
We now have the master plan to save the poor, just way Troy Jones wants us to! Sign the real 36% rate cap petition, nominate Bernie Sanders for President, then vote for both on November 8, 2016!
(Payday lending rate caps and President Bernie Sanders… why do I get the feeling that’s not Troy Jones’s vision of Utopia?)
p.s.: For the record, Hillary Clinton also appears unfond of payday lenders.
pp.s.: In the 2013–2014 election cycle, payday lenders spent $4.2 million on campaign contributions and $11.3 million on lobbying. The top twenty recipients were Republican candidates and organizations. Seven Democrats (including Rep. Debbie Wasserman-Schultz—booooo!) and the Democratic Senatorial and Congressional Campaign Committees appear in the top fifty, receiving $282,100, or less than 7% of the payday lenders’ campaign contributions.