Tag Archives: FDIC

Giving Some Love to Postal Banking

Postal Service ATM in Japan

New Orleans       The rise of interstate banking since 1980 has led to countless consolidations as major money center banks have reduced headquarters locations and branches where customers can easily do financial business.  The Wall Street Journal reported that 1700 branches closed in a one-year period highlighting a trend after acceleration up to 2009 when the banks competed for market share.   In the last decade US banks have closed 9000 branches.  According to the FDIC this was offset by smaller banks adding branches as they tried to move into the spaces left behind.

None of this is financial news.  For years banks have claimed to ACORN, directly when we were negotiating with them about their community investments, that they “lose money” on individual accounts.  Anyone with an account can testify to this as we are steadily pushed away from monthly printed statements and into on-line banking, along with constant e-marketing requests and efforts to upsell to other products.  Minimum balance fees for accounts and exorbitant charges of overdrafts have pushed many lower income and working families completely outside of the regular banking system.  For all of the big talk about financial education and literacy, the unbanked in the United States has been an unyielding problem even though there are claims that the number is falling.   In 2017, the U.S. had 8.4 million unbanked households, or about 14.1 million adults.

There is a solution in a neighborhood near you and everyone else:  postal banking.  Democratic candidates including Senator Gillibrand from New York and Senator Warren from Massachusetts have come out in favor of postal banking.

So, what is postal banking.  Simply put it would allow local post offices to offer banking services to families without accounts or credit cards.  In many countries, like Japan and India, postal banking is a secure savings system.  The Campaign for Postal Campaign has advocated using the postal system for check cashing, small loans, savings, and other basic financial services that are now either a void or filled by predatory businesses like payday lenders and check cashing facilities with exorbitant charges.  We have worked closely with postal workers unions in the US and Canada to attempt to expand these services as part of our effort to beat back predatory operators.

Interviewing Mark Dimondstein, the president of the American Postal Workers Union in 2017 on Wade’s World left no doubt at the support of postal workers for expanding vital services both to more fully utilize facilities and to maintain work and financing for the USPS.  Mehrsa Baradaran a law professor at the University of California at Irvine calls postal banking a “public option.”

It would be wonderful if postal banking finally received the attention it deserves as a support for all of the families that need accessible and affordable financial services.

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Middle Class, Walmart Lies, Too Big to Indict or Fail, Altruism, and Stress

unions rally in Michigan

New Orleans    You wouldn’t believe it, if it weren’t true!

Second Walmart Supplier Found in Bangladesh Fire Tragedy:  Steven Greenhouse, NYT

Scott Nova, executive director, of the Worker Rights Consortium, said the new documents raised additional questions about Walmart’s role at the factor.  ‘If Walmart’s claim that they were the victim of one rouge supplier had any shred of credibility, it’s gone now.  Walmart is limited to one of two options – to say, yes, we know these suppliers were using the factory or, two, we have no control over the supply chain that we’ve been building in Bangladesh for more than 20 years.”

Attack on Union Security in Michigan, Home of UAW and Middle Class:  Monic Davey, NYT

“We’re hearing from people around the country asking what in the world is happening in Michigan,” said Senator Debbie Stabenow, a Democrat.  “The governor had said he didn’t want to become Wisconsin.  Well, this is Wisconsin – and worse, because we’re the place, frankly, where the middle class began.”

HSBC Agrees to Pay Almost $2 Billion for Money Laundering, But…

HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict.   (Ben Protess & Jessica Silver-Greenberg, NYT)

But, None of them Know What to Do With “Banks Too Big To Fail” Still!

The paper from the Bank of England and the F.D.I.C. focused on one way to accomplish this. The relevant regulator would take control of the bank’s parent company, then embark on a restructuring. By saying they are focusing on the parent company, regulators hope to shape expectations in the market and minimize destabilizing uncertainty when a bank implodes. This approach, “will give greater predictability for market participants about how resolution authorities may approach a resolution,” the regulators wrote.  The strategy then aims to put a seized bank back on its feet. In most cases, the bank would be insolvent, meaning that losses had eaten all its equity. To right the bank, the regulator would take the parent company’s debt and turn it into enough equity to support the bank’s operations in the future.   But questions surround the strategy. The paper is little more than a commitment to cooperate. In other words, it does not give either regulator the power to reach into a foreign jurisdiction to restructure a bank.   [Peter Eaves NYT]

Can’t Inhert Altruism, but at Least it Feels Good to Give:  Perri Klass, NYT

“There is some degree of heritability,” said Carolyn Zahn-Waxler, a senior research scientist at the University of Wisconsin-Madison, who has done some of these twin studies. But she notes that the effect is small: “There is no gene for empathy, there is no gene for altruism. What’s heritable may be some personality characteristics.”   Scott Huettel, a professor of psychology and neuroscience at Duke, described two broad theories to explain prosocial behavior. One, he said, was essentially motivational: It feels good to help other people. Economists have also looked at the question of altruism, and have hypothesized about a “warm glow effect” to account for charitable giving.

Don’t Worry about All of This Though, Chill Out! – Jane Brody, NYT, Personal Health Column

In an interview, Dr. Chansky said that when real calamities occur, “you will be in much better shape to cope with them if you don’t entertain extraneous catastrophes.”  By “extraneous,” she means the many stresses that pile up in the course of daily living that don’t really deserve so much of our emotional capital — the worrying and fretting we spend on things that won’t change or simply don’t matter much.  “If you worry about everything, it will get in the way of what you really need to address,” she explained. “The best decisions are not made when your mind is spinning out of control, racing ahead with predictions about how things are never going to get any better. Precious energy is wasted when you’re always thinking about the worst-case scenarios.”  When faced with serious challenges, it helps to narrow them down to specific things you can do now. To my mind, Dr. Chansky’s most valuable suggestion for emerging from paralyzing anxiety when faced with a monumental task is to “stay in the present — it doesn’t help to be in the future.  “Take some small step today, and value each step you take. You never know which step will make a difference. This is much better than not trying to do anything.” Dr. Chansky told me, “If you’re worrying about your work all the time, you won’t get your work done.” She suggested instead that people “compartmentalize.”

There you are, ready for another day!

 

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