Liz Warren Goes Postal

By Greg Palast, Reader Supported News

27 February 14

Greg Palast has just released a compilation of his investigative reports for BBC Television and Democracy Now! as a full-length documentary, Vultures and Vote Rustlers. Catch the trailer at http://youtu.be/N4f0Ekqg5t0

lizabeth Warren must think she looks good in a sharkskin suit. There's no other way to explain her fronting for a cruel, stupid, and frightening plan to turn post offices into loan-sharking bodegas in low income neighborhoods.

As a card carrying progressive, I'm supposed to drink the water Liz walks on. But right now, she's in over her head.

The Massachusetts senator wants President Obama to issue an executive order that would put the US Postal Service into the business of "payday lending" - giving out short term loans to the desperate poor against their coming paychecks.

Her intentions are good. She wants to put private payday lenders out of business. These are the predators, centered in poor neighborhoods, who will lend you money for a few days or weeks until your next paycheck. Here's the catch: you have to sign over your paycheck in advance - and the effective interest runs an average of 391%. No kidding.

But the senator proposes to get rid of these payday predators by turning every post office into a financial fleecing factory.

And the Postal Service can't wait to jump into the shark tank. I've read the Postal Service plan's details. The USPS wants to "partner" with the very banksters now chewing on the payday poor.

The Postal governors crow that their Warren-backed scheme will bring in $8.9 billion in profit: that's $8.9 billion charged to the poorest folk in America.

And that's plain insane - and unnecessary, because there's a much better way to clean out the shark tank.

Warren's plan is based on a scheme promoted by Mehrsa Baradaran, formerly a lawyer with the lobbying firm for the big banks, Davis Polk & Wardwell. In a New York Times editorial (which failed to mention her bank lobbying work), Baradaran wrote that there are "essentially two forms of banking: regulated and insured mainstream banks to serve the needs of the wealthy and middle class, and a Wild West of unregulated payday lenders and check-cashing joints that answer the needs of the poor - at a price."

That's just plain wrong. There's a third system: the one thousand not-for-profit community credit unions across America. These small, customer-owned banks provide full, low-cost services in areas that the big banks won't touch.

The "Wonderful Life" Solution

I guess Senator Warren never heard of Occupy Wall Street — which called for every person with a bank account and a soul to withdraw money from Chase, Citibank, and the other banker bandits, and open accounts at their local consumer-owned community credit union. (Find yours here: http://www.cdcu.coop/about-us/member-directory/.)

Occupy Wall Street put its own cash receipts into the Lower East Side People's Federal Credit Union, a short march from Wall Street - and where, I'm proud to say, the Palast Investigative Fund also keeps its working accounts.

People's is a typical community credit union. With branches in Harlem and the Latino "Loisaida," 92% of its loans are given to member-owners whose incomes are near or below the poverty line. It is the only bank in New York that offers accounts for the homeless. And it provides what the bankers - and the Post Office - never will: savings and checking accounts, long-term and short-term (not "payday") loans, mortgages and credit cards at low cost.

And People's, board chair Deyanira Del Rio told me, has a simple goal: not just to replace pay-lenders and loan sharks, but to replace the entire, stinking rotten for-profit banking system.

And that's the difference between the "let's-help-the-little-poor-people" liberal Liz plan and the Occupy Wall Street radical stand: banking for people, not for profit. (For more on People's FCU, Occupy Wall Street and their battle with Goldman Sachs, check out "Goldman v. OWS."

While People's and other community credit unions offer full-service banking - and a chance for low-income folk to get good credit ratings, credit cards, safe-deposit boxes, tax assistance, long-term loans and even mortgages, the postal plan pushed by Warren declares from the outset that it will only provide "non-bank" services, i.e., ghetto rip-offs only: payday loans, pre-paid debit cards (a notorious racket), high-charge money transfers and, weirdly, Bitcoin exchange.

Pre-paid cards will cost $180 a year (!); and postal payday will carry interest triple that charged by credit unions.

(People's CEO wants me to note that credit unions oppose all payday loans - and therefore provide a loan with a bank account, so the un-banked can access full, lower cost services.)

The Post Office admits its sudden interest in the poor is because it is hunting for a "major new revenue" stream to save itself from bankruptcy. (Warren, who once advocated for high reserves and sound banking, wants to turn over poor folk to a stamp-vending operation that itself is begging for a payday loan.)

In effect, Warren's plan to go postal dumps the nation's poor into a back-of-the-bus pre-bankrupt financial kill zone. The big banks, by the way, will love it: it will relieve them of their obligation under the federal Community Reinvestment Act to provide bank services to local communities.

Result: The Warren plan will guarantee a new wave of bank branch closures in low-income and rural areas.

Chase can close its branches in poor neighborhoods while selling them high-fee pre-pay cards, money transfers and payday loans. This is Jamie Dimon's dream: payday loans in New York and other states are deemed a crime - but with an Obama-blessed plan, the crime spree would have federal protection.

Few in the middle class, one-percenters, senators or Harvard professors, have ever been inside a community credit union - but most of us have seen one: In the film It's a Wonderful Life, Jimmy Stewart plays a banker who wants to drown himself because he's lost his town's money. Do you think Robert Rubin of Citibank ever thought of killing himself for losing a trillion dollars of public funds? No, Stewart was playing the CEO of a "building society," today's community credit cooperative.

(Not-for-profit banker Stewart was saved by angels. If Rubin jumped off a bridge, it's hard to imagine an angel bothering to drop its harp.)

Does Senator Warren understand the disastrous consequences of her good intentions? We're waiting for a call-back from her office.

Senator, if you want to be on the side of the angels and America's bankless poor, here are three easy steps that don't involve turning postmen into loan sharks:

1. Enforce the Community Reinvestment Act. The Obama administration is sitting on its tuchas while banks close their branches by the thousands and "banks" like Goldman Sachs ignore the law's requirement that they provide loans and bank services in under-served areas.

2. Enforce laws against predatory banking. Payday lenders are predators, and their charges are already illegal in many states. A crusading attorney named Eliot Spitzer had planned to announce a lawsuit by all 50 state attorneys general to put an end to all "sub-prime" mortgage loans, predatory on their face. Unfortunately, the case got caught in his zipper. And so the bankster crime-spree continues. Like the old loan sharks handcuffed by the FBI, payday lenders should be put out of business, not have their operations expanded into post offices.

3. Most important: support, expand, and take the shackles off community credit unions. Laws currently prevent cooperative banks from getting the kind of help, capital access, and support the government and Federal Reserve give to commercial banks.

So, here's an idea, Senator. While the USPS wants to "partner" with big banks, why not, instead, allow community credit unions to use post offices as annexes to provide full, complete, non-usurious neighborhood banking services? This is the type of full-service "postal banking" successful in Switzerland and Japan that is envisioned by Ellen Brown, not the payday predation proposed by the USPS. Some of my colleagues have endorsed "basic banking services" pushed by Warren - without noting that the USPS plan, titled "Non-Bank Financial Services," explicitly excludes true banking for the poor, i.e. offering payday loans, not bank accounts.

So there you are, Senator. Shed the shark-suit and give America the chance for a banking system you don't have to lick on the back.

Greg Palast's new film, "Vultures' and Vote Rustlers," including his investigation, 'Goldman versus Occupy Wall Street,' will be released on DVD and as a download today. The film is based on his reports for BBC Television and Democracy Now!

Five Things You Should Know About Me

By Sandra Fluke, Reader Supported News

27 February 14

y career has always been devoted to the public interest, whether representing victims of human trafficking and domestic violence or advocating for social justice legislation. A few years ago, I was unexpectedly thrust into the public eye when I testified before members of Congress regarding the importance of comprehensive insurance coverage for reproductive health. As the media attention and the personal attacks grew, I knew I could retreat and wait for it to pass, but I believed it was my responsibility to stand up and use the microphone I was given to advance the policies I've always fought for.

I want to serve in the California State Senate for the same reason: it's how I can most effectively fight for the change my community needs. I am asking for the votes of the people of the 26th Senate District because for a decade I've been fighting for legislation on issues that matter to families here in Southern California.

Some folks may know only what national media has highlighted about my work. I've already begun meeting directly with voters throughout this district, but in case we haven't gotten to meet in person yet, here's some of what I'd tell you:

1) I've worked on a myriad of progressive issues

I have done a lot of work to advocate for affordable access to birth control and other reproductive justice concerns, but it is far from the only issue I am passionate about.

I've helped pass legislation ending discrimination against LGBTQ folks in family court, and for over two years worked with a grassroots coalition to pass the California Domestic Worker Bill of Rights. I've advocated for young people to have access to affordable health coverage, for student loan debt relief, and for raising the minimum wage.

2) I am a proud Angeleno

I am proud of the work I've done over the years to serve my community in Los Angeles. Back in 2010, funded by the Women Lawyers Association of Los Angeles, I produced an informative film guide to help victims of domestic violence obtain restraining orders in LA courts. I represented those victims myself at Neighborhood Legal Services of Los Angeles. At the Coalition to Abolish Slavery and Trafficking, I'm one of the longest running volunteer attorneys representing victims of human trafficking. I chair a program that trains LA's grassroots advocates at the National Council of Jewish Women of Los Angeles. I have been active on issues impacting families across Los Angeles and look forward to continuing to serve my community as a State Senator.

3) My roots are in the middle class

I grew up in a rural community in a middle class family. My father worked in manufacturing and saw plants open and close, union jobs come and go, for decades. Now he's a pastor. My mother works in a public school as a guidance counselor, and because my family was willing to make sacrifices for me, I was the first person in my dad's family to earn a bachelor's degree.

When people talk about adequate funding for education, affordability of college, and how we need to work with teachers to improve the education we provide for every child, I understand it on a personal level. When voters talk to me about the middle class getting squeezed, or the lack of job security, I know what that feels like. Like many, my upbringing shaped me and has helped define my positions on education, jobs, and economic justice.

4) Sacramento is where I can most effectively create progressive change

Democrats have a narrow super-majority in Sacramento, and California is a legislative model for other states. While Washington is paralyzed, Sacramento is a place where exciting legislation can become law if there's the right person there to fight for it. I've been fighting for California legislation like the repeal of the family cap on public assistance. As a State Senator, I'll push California to be a progressive leader for the rest of the country.

There's a lot that needs to get done in Sacramento. Successful implementation of the Affordable Care Act is extremely important for the state. We need to protect our fragile environment and beautiful coast. We need to support good job creation to grow our middle class. The list goes on and on.

5) I'm going into this with my eyes wide open

Sacramento is far from perfect. There are too many elected officials who are there to fight for special interests instead of the people who voted them into office. That's why we need a fresh perspective, and a representative who doesn't need to repay decades of political favors.

I'm not that kind of insider special interest candidate, so I am going to have several well-funded opponents. Deep-pocketed special interests are already weighing in on behalf of other candidates. Because the 26th State Senate District has almost one million residents, this will be a big, expensive campaign. I will need the support of everyone who stood with me in 2012!

Although this will be a tough campaign, I have never backed down from a fight, and I know how important the change I'm for is. I am excited to work hard every day in neighborhoods from Redondo Beach to Santa Monica, from Torrance to West Hollywood.

Now you know me a little better. Those who know me best will tell you that I've always fought for progressive change and that I'll make my constituents proud. Please visit www.standwithsandra.org to join me in this fight.