As with most policies...sounds great on paper. Let's think about implementation....
1. Who runs this bank? Ever deal with USPS workers? Yea...not great. What about the senior USPS leadership's management abilities? Oh yea that track record is borderline criminal. So we give them more responsibility and budget?
2. Loans for reasonable amounts to high risk people. Why dont larger banks or startups setup operations to serve loans to the folks who rely on payday loans. Do you really think that smart entrepreneurs have not thought about the $89B dollar payday loan industry? Of course they have and guess what -- they cant beat payday loan rates. Why are they so high? It's not gouging as much as it is matching the risk of non-payment to the loan. Low income folks already taking loans on their current paycheck are not the most reliable to repay the loan (for a larger amount) at a later date.
Overall, I am not against banking services to under served. I just have no confidence that the government can effectively become a (rather large) bank. Other government banking forays have not done too well (Fannie Mae/Freddie Mac anyone?)
Comparing other countries is hard as well...different cultures, scale, and needs muddy the water to do a real apples to apples comparison
1. Who runs this bank? Ever deal with USPS workers? Yea...not great. What about the senior USPS leadership's management abilities? Oh yea that track record is borderline criminal. So we give them more responsibility and budget?
2. Loans for reasonable amounts to high risk people. Why dont larger banks or startups setup operations to serve loans to the folks who rely on payday loans. Do you really think that smart entrepreneurs have not thought about the $89B dollar payday loan industry? Of course they have and guess what -- they cant beat payday loan rates. Why are they so high? It's not gouging as much as it is matching the risk of non-payment to the loan. Low income folks already taking loans on their current paycheck are not the most reliable to repay the loan (for a larger amount) at a later date.
Overall, I am not against banking services to under served. I just have no confidence that the government can effectively become a (rather large) bank. Other government banking forays have not done too well (Fannie Mae/Freddie Mac anyone?)
Comparing other countries is hard as well...different cultures, scale, and needs muddy the water to do a real apples to apples comparison