Over the Hill

‘Non-bank’ at post office is a nonissue

Phil Dirkx
Phil Dirkx

This past holiday season, I had only two lines of Christmas cards festooned on our family room wall above the bookcases and the Sony stereo console. I just now realized how retro the stereo is. It even has a turntable.

Anyhow, we didn’t get as many Christmas cards this year. We usually receive enough to load three lines of colored yarn.

The explanation for the fewer cards is simple: The years have whizzed by; some of our Christmas correspondents may be too aged to continue, and some have passed from the scene. And some sent e-cards. I haven’t yet resorted to that. You can’t decorate a family room with e-cards.

The dwindling cards were also another sign of the declining business at our post offices. Another symptom of that decline was the “white paper” that appeared on the Internet last week. It came from the Office of the Inspector General of the United States Postal Service.

The title of the white paper was “Providing Non-Bank Financial Services for the Underserved.” That title seems to have been worded in hopes of keeping actual banks from objecting to the competition. The white paper predicted the Postal Service’s non-bank would partner with actual banks.

The white paper also anticipated the Postal Service would earn considerable added revenue from the new non-bank services. It mentioned $8.9 billion. If that keeps the Postal Service alive, I’m for it. I like the Paso Robles Post Office. It’s a sociable place.

I guess what qualifies the Postal Service’s service as a non-bank would be its lack of bankbooks. Instead, each depositor would get a little plastic card looking like a credit card. It would be a Postal Service reloadable, prepaid card. You could use it everywhere you could a credit card, but you wouldn’t get billed after using it. You would have deposited your money for it in advance.

But who needs it? Don’t all Americans already have checking accounts and credit cards? Well no, not according to the white paper. It says, “One in four U.S. households lives at least partially outside the financial mainstream — without bank accounts or using costly services like payday lenders.”

The white paper compares a hypothetical postal loan with a payday loan: “The average payday loan of $375 costs consumers $520 (interest and fees) over the life of the loan. A postal loan for the same amount could cost just $48.”

The effective annual interest rate for a postal loan isn’t cheap. It’s 28 percent. But on the payday loan, it’s a crushing 391 percent, which is another reason the poor get poorer.

Phil Dirkx’s column is special to The Tribune. Reach him at 238-2372 or phild2008@sbcglobal.net.