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I always felt that DeFi is the obvious solution to these problems. These people need ways to get paid or take out loans so they can get back on their feet, but

I always felt that DeFi is the obvious solution to these problems. These people need ways to get paid or take out loans so they can get back on their feet, but it’s difficult with America’s draconian regulations. More succinctly, we need to bank the unbanked.

razakel 3y ago
The obvious solution is for the banking industry to partner with the post office and offer basic services through them. It's win-win - the post office gets a new revenue stream, and the banks get to close branches. Nowhereville doesn't need a Bank of America, but it'll always have a post office.
- ethbr1 3y ago
  Example: afaik, Japan essentially does this
  - omginternets 3y ago
    Example 2: France
    - Kalium 3y ago
      Example 3: The USA. It was subsequently shut down because it couldn't compete with private banks.
      - omginternets 3y ago
        Why does a public service need to be competitive with private banks? I think much of the point is to collectively pay for a safety-net service. That service is: minimal banking functionality for all citizens, so that they can contribute to society. (Edited for tone. Sorry about that!)
        Kalium 3y ago
        It cost money to run and the customer base pulled its funds in favor of better choices. The goal of a postal bank is often framed in terms of a source of revenue for the USPS. Examples include in this very thread. If there's no expectation of net-positive revenue, then there needs to be a different justification for why the post office should spend money to offer everyone banking service inevitably inferior to the private sector. Plus, now you have all the politics that come with a subsidized service and paying for it. If it can pay for itself, it's much simpler. Postal banking is often advanced as an idea for a public service that will eat Wall Street's lunch to the benefit of all. We should be at least a bit skeptical of the unvarnished optimism of that. Further, I think that if we're going to seriously discuss the topic we need to grapple seriously with why the US doesn't have one anymore.
        omginternets 3y ago
        >It cost money to run and the customer base pulled its funds in favor of better choices. Again, you're presenting things in commercial terms, but this was never meant to be a commercial enterprise. >Postal banking is often advanced as an idea for a public service that will eat Wall Street's lunch to the benefit of all. That is a silly idea, but it seems you're ignoring the good idea. Again, this idea is: pay for a service that ensures Americans always have minimum viable banking. Upshots include: poor people can participate in the economy and in some cases, pull themselves out of poverty.
        Kalium 3y ago
        I don't know if you're aware of this, but the United States Postal Service is self-funding. My understanding is that they are required to be. They do not receive a yearly budget from Congress. This means questions like "How will this be paid for?" are not idle distractions to derail good ideas with impossible perfection. They are key obstacles to be overcome. To have USPS run a bank as a non-self-funding public service would mean they would have to go to Congress to raise prices to subsidize it. This is always a political process, and I imagine the cost of things like stamps falls more on the poor than on the rich. Alternatively, you could find a way to rework the entire legal and financial infrastructure of the USPS so that it does run on direct federal funding. This is, to put it mildly, a lot of work. Whether or not it's a good idea depends in no small part on what your precise goals are and how you expect to achieve them. If your goal is for poor people to have access to basic banking services, then the Bank On program and local credit unions might be better options for many people. If your goal is for poor people to have access to credit, then a postal bank is probably not a good choice unless you want lots of poor people having their credit wrecked by a public service. Generally the idea is to have a public bank with the postal system being a convenient vehicle for that, rather than some deep and fundamental ties between post offices and banks in the modern world. The postal service in the US might not be as ideal a vehicle as it is in some other places. In summary, a postal bank that can pay for itself is far more likely to get set up and deployed widely. This is an important point because of how USPS is regulated.
- deleted 3y ago
  [deleted]
Kalium 3y ago
Can you help me understand how distributed financial systems enable people in dire need of housing and supportive social services, who often with poor to zero access to legal infrastructure, get back on their feet when they are often struggling with mental health or substance abuse problems? Bonus points for an explanation that helps in the context of high housing costs, housing supply shortages, and the people in question experiencing low incomes.
MisterTea 3y ago
We also need to add serious mental health care as many are suffering from mental health issues self remedied by addiction to intoxicants. I have a family member who's been addicted for decades and even holding their hand by driving them to detox (a huge fucking scam) or therapy and putting a roof over them with food is not enough. They're so mentally fried from years of doing nothing but being high: no job, no social life, no hobbies - they just get high to pass the time day after day after day for over two decades. The only reality they know is a stupor. Sure, they might make a little progress from the weekly visits to a shrink but any stressor sends them right back to cloud city. From my experience they need daily if not 24/7 companionship with some kind of mental health life coach or whatever to keep them focused and anchored. Any opportunity to get high they will take so they need continuous supervision. Even family members don't have that kind of time to invest. It's such a stupid hard problem to solve.
PeterisP 3y ago
The solution to bank the unbanked doesn't need a technological solution, it needs a motivation solution - banks can already "bank" everyone if they want to, but they don't. The EU approach to that is establishing a right to a basic bank account that banks can't refuse, often with a combination of ID laws that try to ensure that everyone has a gov't issued ID - and the outcome (at least local to me) is that even homeless drug/alcohol addicts begging on the street do generally have a bank account and payment card, and that is the mechanism they use, for example, for accessing any government benefits (such as social security) they may receive. But that being said, while banking the unbanked is IMHO a good thing, I'm not convinced that it would be a meaningful change to reducing homelessness - if they get a job, they can get paid in various other ways, and the problem with loans is not with executing the loan payment, but with someone willing to lend them money and accept the risk of default.

razakel 3y ago

The obvious solution is for the banking industry to partner with the post office and offer basic services through them. It's win-win - the post office gets a new revenue stream, and the banks get to close branches. Nowhereville doesn't need a Bank of America, but it'll always have a post office.

ethbr1 3y ago
Example: afaik, Japan essentially does this
- omginternets 3y ago
  Example 2: France
  - Kalium 3y ago
    Example 3: The USA. It was subsequently shut down because it couldn't compete with private banks.
    - omginternets 3y ago
      Why does a public service need to be competitive with private banks? I think much of the point is to collectively pay for a safety-net service. That service is: minimal banking functionality for all citizens, so that they can contribute to society. (Edited for tone. Sorry about that!)
      - Kalium 3y ago
        It cost money to run and the customer base pulled its funds in favor of better choices. The goal of a postal bank is often framed in terms of a source of revenue for the USPS. Examples include in this very thread. If there's no expectation of net-positive revenue, then there needs to be a different justification for why the post office should spend money to offer everyone banking service inevitably inferior to the private sector. Plus, now you have all the politics that come with a subsidized service and paying for it. If it can pay for itself, it's much simpler. Postal banking is often advanced as an idea for a public service that will eat Wall Street's lunch to the benefit of all. We should be at least a bit skeptical of the unvarnished optimism of that. Further, I think that if we're going to seriously discuss the topic we need to grapple seriously with why the US doesn't have one anymore.
        omginternets 3y ago
        >It cost money to run and the customer base pulled its funds in favor of better choices. Again, you're presenting things in commercial terms, but this was never meant to be a commercial enterprise. >Postal banking is often advanced as an idea for a public service that will eat Wall Street's lunch to the benefit of all. That is a silly idea, but it seems you're ignoring the good idea. Again, this idea is: pay for a service that ensures Americans always have minimum viable banking. Upshots include: poor people can participate in the economy and in some cases, pull themselves out of poverty.
        Kalium 3y ago
        I don't know if you're aware of this, but the United States Postal Service is self-funding. My understanding is that they are required to be. They do not receive a yearly budget from Congress. This means questions like "How will this be paid for?" are not idle distractions to derail good ideas with impossible perfection. They are key obstacles to be overcome. To have USPS run a bank as a non-self-funding public service would mean they would have to go to Congress to raise prices to subsidize it. This is always a political process, and I imagine the cost of things like stamps falls more on the poor than on the rich. Alternatively, you could find a way to rework the entire legal and financial infrastructure of the USPS so that it does run on direct federal funding. This is, to put it mildly, a lot of work. Whether or not it's a good idea depends in no small part on what your precise goals are and how you expect to achieve them. If your goal is for poor people to have access to basic banking services, then the Bank On program and local credit unions might be better options for many people. If your goal is for poor people to have access to credit, then a postal bank is probably not a good choice unless you want lots of poor people having their credit wrecked by a public service. Generally the idea is to have a public bank with the postal system being a convenient vehicle for that, rather than some deep and fundamental ties between post offices and banks in the modern world. The postal service in the US might not be as ideal a vehicle as it is in some other places. In summary, a postal bank that can pay for itself is far more likely to get set up and deployed widely. This is an important point because of how USPS is regulated.
deleted 3y ago
[deleted]

Kalium 3y ago

Can you help me understand how distributed financial systems enable people in dire need of housing and supportive social services, who often with poor to zero access to legal infrastructure, get back on their feet when they are often struggling with mental health or substance abuse problems? Bonus points for an explanation that helps in the context of high housing costs, housing supply shortages, and the people in question experiencing low incomes.

MisterTea 3y ago

We also need to add serious mental health care as many are suffering from mental health issues self remedied by addiction to intoxicants. I have a family member who's been addicted for decades and even holding their hand by driving them to detox (a huge fucking scam) or therapy and putting a roof over them with food is not enough. They're so mentally fried from years of doing nothing but being high: no job, no social life, no hobbies - they just get high to pass the time day after day after day for over two decades. The only reality they know is a stupor. Sure, they might make a little progress from the weekly visits to a shrink but any stressor sends them right back to cloud city. From my experience they need daily if not 24/7 companionship with some kind of mental health life coach or whatever to keep them focused and anchored. Any opportunity to get high they will take so they need continuous supervision. Even family members don't have that kind of time to invest. It's such a stupid hard problem to solve.

PeterisP 3y ago

The solution to bank the unbanked doesn't need a technological solution, it needs a motivation solution - banks can already "bank" everyone if they want to, but they don't. The EU approach to that is establishing a right to a basic bank account that banks can't refuse, often with a combination of ID laws that try to ensure that everyone has a gov't issued ID - and the outcome (at least local to me) is that even homeless drug/alcohol addicts begging on the street do generally have a bank account and payment card, and that is the mechanism they use, for example, for accessing any government benefits (such as social security) they may receive. But that being said, while banking the unbanked is IMHO a good thing, I'm not convinced that it would be a meaningful change to reducing homelessness - if they get a job, they can get paid in various other ways, and the problem with loans is not with executing the loan payment, but with someone willing to lend them money and accept the risk of default.