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This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy. When debt is cheap for megacorps, banks and hig

This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy. When debt is cheap for megacorps, banks and high net worth individual, money creation goes into over-drive, but not for cash strapped companies or individuals. Central banks doubled down on this last year as well -- it's debatable whether it's what they had to do or not but at this point I'm convinced all central banks really do is start bubbles and encourage moral hazard. Monopolies and duopolies emerging left and right. "Tech" Startups these days look more and more like convenient customer/innovation acquisition vehicles for inevitable big fish and less like small businesses.

toomuchtodo 5y ago
True. So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone. If you want to offer something more fancy as a fintech or commercial bank, go for it if you can make the economics work. Search keywords for more info on this topic: “FedAccounts”, “Banking for All” Disclosure: I am actively advocating for this policy with policymakers.
- clairity 5y ago
  having a public option that’s not subsidized and competing fairly is a reasonable policy. the biggest potential issue i see is having the federal govt middle-manning all those otherwise private financial transactions, but that could be mitigated by having a private and a public bank account, with instant transfers to move money back and forth. and offering these through the usps seems like a winning move, through their well-established post offices all across the country (at least the ones not sold off at fire-sale prices in the past few administrations).
- hardwaresofton 5y ago
  That sounds like something that should definitely happen -- my worry is regulatory capture. I have very little confidence in the ability of politicians and related agencies to predict and defend against the machinations of private industry who would try to eke out a corner of the government-mandated gravy train for themselves for all time. Would FedAccounts be essentially FedWire extended for regular people? It seems like governments don't really share information otherwise we could just lift the tech from Sweden (Swish). It would be an absolute sea change, but I want I want to starve is the finance beast as a whole -- the hedge funds that front-run and sometimes directly exploit pension funds, etc. I personally think that one of the biggest things someone could do to unwind the current financial system's largess is just ply a bunch of money/expertise/tech at improving credit unions. I maintain an account at a credit union and I absolutely love it, the people that worked there actually seemed happy, plugged in to the local economy and society. It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates). If the large institutions don't get all the deposit flow, then they can't offer the huge leverage to the firms, HNW individuals, etc -- credit unions aren't going to be out there offering 15x+ leverage to Archegos Capital. Since what I've written is essentially a wishlist/vapor-policy, let's reinstate Glass-Steagall while we're at it.
  - ryandrake 5y ago
    > It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates). And whenever you ask someone why the hell they use UltraMegaBankOfAbuse, they always cite some far fetched scenario that makes Credit Unions slightly less convenient. “Well, if I ever found myself in the deserts of Morocco, and needed to use an ATM to pay my electric bill, there wouldn’t be a Credit Union branch there, so checkmate! I obviously need to bank with Chase!” It’s like they are looking for any excuse to abuse themselves.
    - swearwolf 5y ago
      I used to bank with a local credit union, and now bank with one of the largest banks in the United States. The credit union was nice enough, but they signed up with that mobile banking provider that many credit unions seem to use, and the usability went down the drain. I tried to find a local credit union that was not using that platform, but couldn’t. The large bank’s app is great. Also one time the credit union let someone sign my account up to pay for their car loan, because the clerk who set up the automatic payments accidentally typed in my account number, which was one off from the car loan holder’s. To their credit, the credit union was quick to resolve the issue, but it left a bad taste in my mouth that it was so easy for them to make that mistake and nothing on the back end to catch it.
      - throwawayboise 5y ago
        I'm with a credit union. I'd never trust my phone with access to my bank account, but I use their web site. Does fine. I can check my balances, pay bills. What else do you need?
      - harikb 5y ago
        i have a similar experience - CUs sometimes outsource too much. In mine, they outsource Statements, Transfer/Bill pay, etc to different vendors/companies. It all works seamlessly with some fancy single-sign-on...except when it doesn't. I don't know who all have my financial details.
- Kye 5y ago
  Just an account that can't block people for no given reason would be an improvement. There's a huge unbanked population that's increasingly shut out of modern life, or at least unduly burdened with alternatives that aren't always accepted like reloadable cards.
  - nradov 5y ago
    I support expanding access to the financial system. But many of those people are blocked because they wrote bad checks. What would you suggest to do with them?
    - toomuchtodo 5y ago
      Don’t offer checks nor overdraft protection. That way, you’re not offering credit and don’t need to gate them from a deposit account because of a previous bad check or other derogatory credit event. Simple did not offer checks (at least pre BBVA acquisition, when I had an account with them), for example. The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions.
      - notyourday 5y ago
        > The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions. We are at least a decade away from the time when checks are not used, probably two. For that to happen the baby boomers must be nearly completely gone from the workforce. The reason why we still use checks is because a lot of businesses are still owned and operated by the boomers whose processes are send out bills => receive checks => mark payments on accounts in folders => deposit a batch of checks into an account. Those are the lifestyle business whose owners/managers are in the last decade of retiring. They won't be either upgrading or selling them.
        unbalancedevh 5y ago
        Some places add on fees for paying by EFT or credit card. When the fee is something like the greater of $3 or 3%, that's an incentive to continue paying by check.
- NaturalPhallacy 5y ago
  >So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone. This would be awesome, but it's never going to happen as the fed is the banks' way of controlling the monetary supply. It's their tool, deliberately not beholden to the populace. I wish you good luck anyway.
  - creato 5y ago
    I think you are confusing monetary policy with retail banking. Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
    - lazide 5y ago
      The parent poster specifically was advocating for the Fed to be handing out retail bank accounts I believe (FedAccount)? It seems like it would be a distraction (though also perhaps a useful tool) in the monetary policy front.
      - toomuchtodo 5y ago
        Fed accounts allow for rapid stimulus payments directly into citizen deposit accounts, instead of the Rube Goldberg IRS payments dance we’re currently doing. Stimulus payments then become a batch job.
        lupire 5y ago
        Eh, that only works if literally everyone has a Fed account, which is the same dance the IRS deals with.
        casefields 5y ago
        For a huge portion of this country it's apparently too difficult to acquire an ID. How on earth are they going to open any bank account?
- aaronbrethorst 5y ago
  Call your Senators and Representative and tell them you want to see Senator Gillibrand's postal banking bill reintroduced in this Congress: https://www.congress.gov/bill/116th-congress/senate-bill/4614 https://www.congress.gov/bill/116th-congress/senate-bill/461...
  - MrMan 5y ago
    Wow this is great
    - hardwaresofton 5y ago
      Wow what a coincidence, your username is the handle I most use on the internet when available
  - leotravis10 5y ago
    By the way, the USPS can do just that if they want to without legislation: https://prospect.org/day-one-agenda/create-public-option-simple-banking/ https://prospect.org/day-one-agenda/create-public-option-sim...
lotsofpulp 5y ago
> This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy. It’s not just loose fiscal policy, it’s also technology’s role in reducing marginal costs. It’s basically impossible for a smaller player to compete in commodity markets like consumer banking because the bigger player has lower marginal costs and can offer a more attractive price. The same as Walmart/Target/Home Depot/Lowes/Best Buy dominating retail.
PeterisP 5y ago
"last decade or so" ? The banking consolidation trend started in late 1980s and has been happening steadily ever since, it happened a lot with the 1990s fiscal policy and it happened a lot with 2000-2010 fiscal policy.
- hardwaresofton 5y ago
  Ahh sorry my internal clock still thinks it’s ~2015ish, I should have said multiple decades — I was thinking basically after the 2000s

toomuchtodo 5y ago

True. So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone. If you want to offer something more fancy as a fintech or commercial bank, go for it if you can make the economics work. Search keywords for more info on this topic: “FedAccounts”, “Banking for All” Disclosure: I am actively advocating for this policy with policymakers.

clairity 5y ago
having a public option that’s not subsidized and competing fairly is a reasonable policy. the biggest potential issue i see is having the federal govt middle-manning all those otherwise private financial transactions, but that could be mitigated by having a private and a public bank account, with instant transfers to move money back and forth. and offering these through the usps seems like a winning move, through their well-established post offices all across the country (at least the ones not sold off at fire-sale prices in the past few administrations).
hardwaresofton 5y ago
That sounds like something that should definitely happen -- my worry is regulatory capture. I have very little confidence in the ability of politicians and related agencies to predict and defend against the machinations of private industry who would try to eke out a corner of the government-mandated gravy train for themselves for all time. Would FedAccounts be essentially FedWire extended for regular people? It seems like governments don't really share information otherwise we could just lift the tech from Sweden (Swish). It would be an absolute sea change, but I want I want to starve is the finance beast as a whole -- the hedge funds that front-run and sometimes directly exploit pension funds, etc. I personally think that one of the biggest things someone could do to unwind the current financial system's largess is just ply a bunch of money/expertise/tech at improving credit unions. I maintain an account at a credit union and I absolutely love it, the people that worked there actually seemed happy, plugged in to the local economy and society. It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates). If the large institutions don't get all the deposit flow, then they can't offer the huge leverage to the firms, HNW individuals, etc -- credit unions aren't going to be out there offering 15x+ leverage to Archegos Capital. Since what I've written is essentially a wishlist/vapor-policy, let's reinstate Glass-Steagall while we're at it.
- ryandrake 5y ago
  > It is bonkers to me that anyone still banks at the large institutions (the ones famous for overdraft "protection") with local credit unions being as good as they are (and often very competitive on rates). And whenever you ask someone why the hell they use UltraMegaBankOfAbuse, they always cite some far fetched scenario that makes Credit Unions slightly less convenient. “Well, if I ever found myself in the deserts of Morocco, and needed to use an ATM to pay my electric bill, there wouldn’t be a Credit Union branch there, so checkmate! I obviously need to bank with Chase!” It’s like they are looking for any excuse to abuse themselves.
  - swearwolf 5y ago
    I used to bank with a local credit union, and now bank with one of the largest banks in the United States. The credit union was nice enough, but they signed up with that mobile banking provider that many credit unions seem to use, and the usability went down the drain. I tried to find a local credit union that was not using that platform, but couldn’t. The large bank’s app is great. Also one time the credit union let someone sign my account up to pay for their car loan, because the clerk who set up the automatic payments accidentally typed in my account number, which was one off from the car loan holder’s. To their credit, the credit union was quick to resolve the issue, but it left a bad taste in my mouth that it was so easy for them to make that mistake and nothing on the back end to catch it.
    - throwawayboise 5y ago
      I'm with a credit union. I'd never trust my phone with access to my bank account, but I use their web site. Does fine. I can check my balances, pay bills. What else do you need?
    - harikb 5y ago
      i have a similar experience - CUs sometimes outsource too much. In mine, they outsource Statements, Transfer/Bill pay, etc to different vendors/companies. It all works seamlessly with some fancy single-sign-on...except when it doesn't. I don't know who all have my financial details.
Kye 5y ago
Just an account that can't block people for no given reason would be an improvement. There's a huge unbanked population that's increasingly shut out of modern life, or at least unduly burdened with alternatives that aren't always accepted like reloadable cards.
- nradov 5y ago
  I support expanding access to the financial system. But many of those people are blocked because they wrote bad checks. What would you suggest to do with them?
  - toomuchtodo 5y ago
    Don’t offer checks nor overdraft protection. That way, you’re not offering credit and don’t need to gate them from a deposit account because of a previous bad check or other derogatory credit event. Simple did not offer checks (at least pre BBVA acquisition, when I had an account with them), for example. The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions.
    - notyourday 5y ago
      > The Fed is rolling out instant payments in 2023, after which I expect checks to be obsolete and no longer offered by financial institutions. We are at least a decade away from the time when checks are not used, probably two. For that to happen the baby boomers must be nearly completely gone from the workforce. The reason why we still use checks is because a lot of businesses are still owned and operated by the boomers whose processes are send out bills => receive checks => mark payments on accounts in folders => deposit a batch of checks into an account. Those are the lifestyle business whose owners/managers are in the last decade of retiring. They won't be either upgrading or selling them.
      - unbalancedevh 5y ago
        Some places add on fees for paying by EFT or credit card. When the fee is something like the greater of $3 or 3%, that's an incentive to continue paying by check.
NaturalPhallacy 5y ago
>So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone. This would be awesome, but it's never going to happen as the fed is the banks' way of controlling the monetary supply. It's their tool, deliberately not beholden to the populace. I wish you good luck anyway.
- creato 5y ago
  I think you are confusing monetary policy with retail banking. Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
  - lazide 5y ago
    The parent poster specifically was advocating for the Fed to be handing out retail bank accounts I believe (FedAccount)? It seems like it would be a distraction (though also perhaps a useful tool) in the monetary policy front.
    - toomuchtodo 5y ago
      Fed accounts allow for rapid stimulus payments directly into citizen deposit accounts, instead of the Rube Goldberg IRS payments dance we’re currently doing. Stimulus payments then become a batch job.
      - lupire 5y ago
        Eh, that only works if literally everyone has a Fed account, which is the same dance the IRS deals with.
      - casefields 5y ago
        For a huge portion of this country it's apparently too difficult to acquire an ID. How on earth are they going to open any bank account?
aaronbrethorst 5y ago
Call your Senators and Representative and tell them you want to see Senator Gillibrand's postal banking bill reintroduced in this Congress: https://www.congress.gov/bill/116th-congress/senate-bill/4614 https://www.congress.gov/bill/116th-congress/senate-bill/461...
- MrMan 5y ago
  Wow this is great
  - hardwaresofton 5y ago
    Wow what a coincidence, your username is the handle I most use on the internet when available
- leotravis10 5y ago
  By the way, the USPS can do just that if they want to without legislation: https://prospect.org/day-one-agenda/create-public-option-simple-banking/ https://prospect.org/day-one-agenda/create-public-option-sim...

lotsofpulp 5y ago

> This has been happening everywhere over the last decade or so, and it's the result of super loose fiscal policy. It’s not just loose fiscal policy, it’s also technology’s role in reducing marginal costs. It’s basically impossible for a smaller player to compete in commodity markets like consumer banking because the bigger player has lower marginal costs and can offer a more attractive price. The same as Walmart/Target/Home Depot/Lowes/Best Buy dominating retail.

PeterisP 5y ago

"last decade or so" ? The banking consolidation trend started in late 1980s and has been happening steadily ever since, it happened a lot with the 1990s fiscal policy and it happened a lot with 2000-2010 fiscal policy.

hardwaresofton 5y ago
Ahh sorry my internal clock still thinks it’s ~2015ish, I should have said multiple decades — I was thinking basically after the 2000s