Bank of the U.S. Postal Agency: The U.S. Postal Service's Office of the Inspector General threw bankers' a curveball this week by releasing a white paper that suggests the agency consider offering financial products such as debit cards, remittances and loans to underbanked consumers to fix its budget shortfall. The suggestion met with swift backlash from bankers who thought the post office offering loans was "the worst idea since the Edsel." But Adam J. Levitin, a professor of law at Georgetown University, argued that the move may not be so crazy after all. "If a postal bank were truly limited to serving the unbanked, it is hard to see how it would directly compete with private banks,"he wrote. "Perhaps, then, the concern is that if a postal bank offered simple, transparently priced, low-cost services, that might start to shape consumer expectations for the whole financial services industry." Levitin's defense of the idea was just as polarizing as the agency's white paper. Some readers thought he was spot-on in his assessment of bankers' reaction to the idea. "Bankers are frightened by competition,"one commenter wrote. "They only cloak their fear in the language of capitalism. They don't believe in it, and certainly not as it applies to services for the poor." But others thought there were plenty of reasons why the post office should keep out of banking. "Retail banking services are not a legitimate function of government under our constitution," Bob Newton wrote. "The Post Office itself is a dying relic of obsolete technology. [Its] management can't avoid losing billions of dollars per year in its basic business, and you want to trust your savings to them?
New School vs. Old School: Aite Group senior analyst Ron Shevlin and BankThink Deputy Editor Jeanine Skowronski faced off in a debate over whether customers want new school or old school banking. (Given the debate's complexity, readers interested in the topic should check out both posts, along with Katya Grishakova's What Bank Customers Want series contribution which sparked the debate and Bradley Leimer's Discerning Technologist post, which wrapped it up at least for now.) Meanwhile, community banker Kevin Tynan argued that small banks could overcome big banks' lock on mobile by playing up the strengths of their existing business model. "Don't seek technology parity with big banks; it's unattainable," he wrote. Rather, "community institutions would do well to recognize the importance of mobile banking, but continue to focus on delivering the services that has fueled their growth for the last hundred or so years." And, on the subject of very new school banking, here's what New York's top regulator Benjamin Lawsky had to say about Bitcoin, following this week's hearings on the cryptocurrency.
In Case You Missed It: Tim Pawlenty, CEO of the Financial Services Roundtable, urged Congress to strengthen the U.S.'s cyber-defenses by allowing more information-sharing among financial firms and bank consultant J.V. Rizzi urged community banks to beware of activist investors.
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