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Bernie Sanders, 36% Rate Cap, and Banking at the Post Office… Problem Solved!

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 SalmonFusion, 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.


  1. mike from iowa 2015-10-28 07:44

    Emergency cash for poor folks-Have Obama sign an executive order attaching all off shore bank accounts of korporate amerika to an account where no wingnut can touch it. Then dip into it and give the poor whatever they need.Two problems solved,Troy. Make sure the greedy pay their fair share and raise the standard of living for the needy.

  2. jerry 2015-10-28 08:12

    As we drive down the roads from Sioux Falls to Rapid City, you see many miles of open areas that are dotted with small towns. Many of these small towns have no kinds of services whatsoever with the exception of the post offices that serve the villagers and those that live in the service area. In other words, this is not only a food desert it is also an economical one as well. There is poverty here. Postal banking would help in these areas as well to provide services for a proud group of people that could and would promote other forms of commerce. Postal banking has shown that it works and needs to be revisited while we dismantle the to big to fail vampire banks that suck the life blood from us as they destroy the economy again and again. 2008 was a baby step for what the to big to fail outfits have in the future unless we make drastic changes. Don’t count on Hillary or any republican to make any changes to the status quo of the mega donors and ultra wealthy kings and princes to keep us chained, there is only one person who can bring this about, Bernie.

  3. Paul 2015-10-28 09:29

    Jerry’s right on! What a great way to shore up the economies of rural towns and villages!

  4. leslie 2015-10-28 09:44


  5. jerry 2015-10-28 10:47

    Hillary got game as well!

    If not for Bernie, I really do not think some of the progressive speak we are hearing from Hillary would have been uttered. Competition is a wonderful thing that tweaks new ideas into the mainstream. I am a Bernie supporter, but also feel that even if he is beaten by Hillary, the party stands to do great things with these ideas that are for the people to expand rather than to chain them with austerity and a failure to provide the basic needs of healthcare like South Dakota does with the refusal of Medicaid Expansion. So hurrah for Hillary, now that she has found voice to buck against the vampires that feed on the helplessness of all who are not the 1%’ers among us. We wish to live with them, not be owned by them.

  6. David Newquist 2015-10-28 11:37

    The citation of Thoreau and “Walden” is a bit of specious pedantry that amounts to the kind intellectual fraud commensurate with the deadly parasitism of payday lending. The entire first section of the book, “Economy,” is a deconstruction of capitalism.

    Counselors in charitable and social service organizations follow a near-unanimous rule when advising people in dire economic straits: never go to a payday or title loan lender. At one time, the church in which I was a member set up a fund for helping people who needed money to pay rent or utility bills with repayment without interest. It actually helped people. The title-loan business is in service of the most predatory kind of greed, not helping the poor get through some tough spots. Payday loans only exacerbate the plight of people who use them.

  7. mike from iowa 2015-10-28 12:21

    Language straight out of the Vietnam 60s and 70s-we have to allow payday lenders to destroy the poor in order to save them.

  8. mike from iowa 2015-10-28 12:23

    HRC can and will say whatever it takes to get the job. Afterwards is gonna be a different story.

  9. troy 2015-10-28 13:19


    Anyway, my point is today access to capital is necessary for all to procure items deemed necessities vs. luxuries generations ago.

    1) Walking to work is rarely possible. Reliable transportation is critical. Few buy cars with cash and those who live paycheck to paycheck may not have the ability to fix a car.

    2) Even renting an apartment or house may be conditional on credit scores. Eliminating means for rehabbing credit is a defacto sentence to slum living and poor conditions for families with children.

    That said, your last paragraph is substantially correct because such counselors are ultimately focused on long-term solutions to the problem of too much debt, Payday lenders are too often used when alternatives are available (but not known by the client but known by the counselor) and/or the current need doesn’t warrant usage.

    If I knew there were options for person who needs emergency cash to fix their car and get to work(Losing pay or losing one’s job makes any interest rate cheap) or who missed work (regardless of the reason) and needed emergency cash to bridge a gap, the existence of pay day lenders would be of no concern to me.

  10. Bill Fleming 2015-10-28 13:37

    Troy’s heart is in the right place no doubt. But his argument reminds me of the classic ones about immigration reform (“first secure the border.”) With not too much effort, I’m guessing he can see them both for the red herrings they are (if he wants to). :-)

  11. jerry 2015-10-28 17:38

    Methinks Troy would have much difficulty in seeing anything other than the tunnel he is now looking through. It is to bad on that as sometimes he really does make sense. Alas, those times are few in number.

  12. caheidelberger Post author | 2015-10-28 18:22

    Emergency cash for people who lost their jobs… hmm, wouldn’t that be unemployment insurance? Post office can deliver those, too.

  13. leslie 2015-10-29 02:00

    So larry u are saying if sddp doesn’t pick up the gauntlet like bernie has, we lose?

  14. larry kurtz 2015-10-29 06:40

    lestlie, what are you doing at 0200?

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