A more lucrative source of postal revenue was also suggested by the Inspector General: the USPS could expand into retail lending for underserved sectors of the economy, replacing the usurious payday loans that can wipe out the paychecks of the underbanked. To critics who say that government cannot be trusted to run a lending business efficiently, advocates need only point to China. According to Peter Pham in a March 2018 article titled "Who's Winning the War for China's Banking Sector?":
One of the largest retail banks is the Postal Savings Bank of China. In 2016 retail banking accounted for 70 percent of this bank's service package. Counting about 40,000 branches and servicing more than 500 million separate clients, the Postal Savings Bank's asset quality is among the best. Moreover, it has significantly more growth potential than other Chinese retail banks.
Neither foreign banks nor private domestic retail banks can compete with this very successful Chinese banking giant, which is majority owned by the government. And that may be the real reason for the suppression of postal banking in the US. Bankers continue to fear that postal banks could replace them with a public option -- one that is safer, more efficient, more stable, and more trusted than the private financial institutions that have repeatedly triggered panics and bank failures, with more predicted on the horizon.
This article was originally published on Truthdig.com.
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