Anything else . I would like to say a word about the ambassador of new delhi. John Kenneth Galbraith, because he is a huge part of this book. John Kenneth Galbraith was a tall man, 6foot six, born in ontario canada, a graduate of the Ontario School about a culture. He then moved to the United States and became an economist, wrote several books in the 1940s and 50s about economics and became one of the stars at harvard university. If not the star of harvard university. But he also became an advisor to kennedy. He kept a diary while he was ambassador to new delhi and later published diary. For the historian of of course theres gold because it isnt a memoir. A memoir is within the later and you put him how brilliant you were on the weather you were or not. The diary you right at the time but at least we still know you said that on the 19th of november, 1960 or otherwise the diary is a fascinating piece of very own political politically unknown dialog. He writes his impressions of everybody. And if everything. The state department for example he constantly criticizes saying working for the state department is like fornicating through a naturalist. He also talks about people and he has a very 1960s attitude towards gender for example. He describes fly in from washington to hawaii with an american Movie Actress at the time and in the diary he says i fell in love before we even took off into the magic of the voyage you have to imagine what it is why think when she read the diary years later but also provides an in orbit amount of information about what the indians were thinking and what they were up to and how the United States government work, how the Kennedy Administration worked. The inside workings of the Kennedy Administration. By somebody that wasnt sitting in the white house did have a but have a very different optic sitting in new delhi watching what was going on in the white house. One of the things that really appalled john Kenneth Galbraith is that he could see the administration sliding into the vietnam war and kept writing to the president saying dont do it, dont listen to the genitals. All they are going to get this into a mass. Its an interesting question of course another one of the great what this. If they had lived with the government of the vietnam war the way way the church agreed that under the Johnson Administration so that is another perspective i think you will find in the book that you dont find anywhere else. Thank you very much for coming. Thank you. [applause] thank you again so much for coming if you would like to get a book these get one signed and if you could do us a favor by pulling up the chairs and facing them against the bookcases that would be great so we have more room to sign. Lets have another round of applause. [applause] good evening and welcome. We are thrilled to have you all here tonight. We are a communal space and we love having the readings and we ask if you dont buy anything tonight please keep us in mind if you need a gift for the upcoming holiday season. We will have a q a session after about 15 minutes and if you have a question make sure that you get the microphone before you ask your question. Joined the georgia law firm in the fall of 2012 and currently serves as an associate professor to banking law and taught banking regulations, property and Administrative Law at Brigham Young university. During her time she was named by one professor of the year by the student bar association. Theyve received significant Media Coverage and was featured in the New York Times covered the atlantic, american banker and other national and International News and radio outlets. Previously an Academic Research scholar at the New York University school of law and practiced as a Financial Institution group in new york city. She got her bachelors degree from Brigham Young university and her law degree from nyu where she was a member of the New York University law review. Please give a warm welcome. [applause] thank you so much for having me. The last time i said i need a pick me up and they gave me the most depressing book i ever read but it did take me up because at least i didnt have their problems. So this book is about a problem that reveals historical causes of the problem and suggests a remedy and im going to use powerpoint because its kind of cool and even though my students can tell you i just kind of hoping it that this is important so i thought i would use powerpoint. So the problem is over half of the u. S. Population would need to borrow money if he had a shortfall of about 400 due to some unexpected expense and when these people face an emergency they have to take out loans if they cant borrow from friends or family of something from 300 to 200 . And as for basic Financial Services, 40 of the public meaning they dont have a bank account or they do but they go elsewhere for their financial needs so these people spend about 10 of their income each year on the Financial Services and this is more than a lot of low income folks spend on food so when policymakers and academics a lot of times talk about this problem as regulating to pay loans or making them go away,. These efforts have been for a frustrating end to these things have been Interest Rate caps and disclosures, military lending meaning the payday lenders use to bring about a military sites, so you would have the base and then write outside of it would be to check the check cash or the payday lenders but these efforts have been really frustrating and its been like a wacko because when its over interested pops up as a fee or you ban the payday lending. The georgia payday lending isnt allowed but we have title lenders or installment lenders and the same model. I understand the amount and the in the price of credit banks lend and just being social policy decisions so bank credit has always been entangled in the federal government and especially after the financial crisis in 2008, but even before that. So youve got the federal funds rate about 0 for the last decade. This is all supposed new deal era especially lately so the discount window loans, all these things you hear about it means the Federal Reserve decides how we borrow the credit and at what price. So the government also creates credit markets through the student loan market etc. So i see payday lending as the un banked problem as much more than a market problem but as a social and political problems so theres a disparity whether it is highly regulated highly subsidized for those who cant afford can afford it and then a very unregulated highpriced basically sometimes predatory sector for those who cant. So how did we get here . And this is where the history comes in. So we had for 200 years in the nations history a Rich CommunityBanking Sector so every bank was in one area so you couldnt have a branch in atlanta. Georgia was once was one state that was advanced and in with what you have two branches of no other states had it that state had so you had local control of money into somewhere around the 1970s that goes away through the Market Forces into deregulation and the murder starts decimating decimating decimating so they get swiveled up in a swoboda pennebaker bank because they are trying to survive so you also have peace savings these savings and loans and Credit Unions that were created for the low income because they were mutual ownership and it starts as people that work at some shop together and then they pool their money and pick a member each month for each year to get a loan to buy a house or some Consumer Product like a refrigerator or Something Like that. And it starts as Mutual Health organizations and all of these around this area stopped doing that sort of thing because it becomes expensive and difficult and im not going to go through that a lot of derisive of history about the shift from savings to credit which i think reveals a lot as we have the bank and then it gets swallowed up in the decade later it gets beaten up by bank of america. There really is a direct relationship. There are no payday loans in the 1960s. Or in the 70s. This industry starts in the 1980s and then blossoms in the 90s and in 2000. So its a brandnew center and that is why the regulators have a hard time dealing with it. So again there is this direct causation but the harder problem is how do you fix it so for the last 200 years again we have this idea that the way to fix any sort of conglomeration is the Grassroots Movement and any effort over the last 30 years has been focused on reinvesting in communities and returning to the Community Model and i think that if we all watch its a wonderful life over christmas, that is the myth of the bank that still looms large in our culture. And i think that we should stop to that idea of communities helping each other however the reality is that the genie has left the bottle. Not only are there not enough sort of Community Minded banks but a lot of them just are not interested in doing it anymore so this is how a lot of the banks feel about the small dollar loans because you have a 500dollar deposit in the bank and that costs the bank money. As soon as it goes below a certain amount of money it becomes expensive for them to deal with it so they would rather have 100,000 so they can make money off of that and these days that the small dollar loans and so savings and also the loans that yield very little profit and are harder to service so they largely left this industry. So again i think we should lament this and its sad that we lost george baileys bank but what do we do now . This is one way the federal government through the structure which is an independent agency selffunded and sustained can come and fix the problems easily and heres why. The post office again going way back. The origins of the post office are fascinating. Really and truly. But there were profitable and subsidized so they made that decision and to Service Every route regardless of cost. The third reason that washington d. C. And new york was center of politics it was hard to go west so they started to give newspapers free and to look at the democracy you i am amazed to know exactly who is voting. Select surprise James Madison who wanted that participation it did not know so much it has a very rich public entanglement. Traneighteen 61 starting social drinking a lot of countries did also. And 18th avenue and into pay for the telegram. The with postal banking in the United States it takes 40 years except for the democrat. Until we see the banking crisis. In tucson that with dodd frank so it becomes the major issue in the president ial election at to have the fdic insurance to see militia have postal drinking because that increases moral hazard. Those are the issues on the table so in 1910 we have a postal the Banking System that passes congress so that 95 percent of all deposits will remain local. That will send state and local money to the treasury. And that is called the poor mans bank. This is the neil to get interest for the many. These are not your customers to pay more for the people that you went and immediately it is successful. With 30 to maine in deposits. Popular so as not the western the rules out it was the immigrants. So in 1910 so they fled the post office of all their money and by 1915 emigrants rose 70 of the deposits but as they swelled with deposits it doubled every year for three years. There is 1. 2 billion dollars of deposits but if he had not chosen fdic insurance so fdr did not like insurance he was convinced to take it as a compromise but then they become less necessary then they are retooled to fund the world wars minister selling war bonds sullys are quite threatening and menacing women this is how we fund the war the use that to pay off the Great Depression that to the tune of 9 billion in there is a sharp deposit with the soldiers out and fighting so then they come back with the burgeoning economy so every community has a bank so the post office moves the customer says they paid 3 so the money flows to see it no longer as necessary and 20 years later those banks are no longer there the way the post office could succeed so well is because of a public function. It was subsidized and not a profitmaking institution. It wasnt a moneymaking and emission is the timing of all classs of citizens the safeguarding of the thousands and that is crucial for ranking in order for them to function. They can do with fdic opposed all bigger banker but for 30 years it was the alternative before we had a Federal Reserve to use as liquidity as the banks would face a crunch that was helpful to fund the wars. Net everyone fails to notice. So they get all the facts wrong. So i think we should be back to offer checking savings possibly small loans to fill the void the pay lenders have filled that has every other country abroad. Think that the public forgotten but this is Big Government to go to an institution it wont otherwise but to maintain the Mortgage Markets with the more small lending market their risky with losses that can occur for you to is lower Interest Period marines but at this point i will stop of above to take any questions you may have. I agree it is a good idea so they are already in danger right now one but the is a this point because they try not to do it through congress. So there is a post office bill that said they can add any more services with the big cars or transactions so that is the next up but that is a 90 billion industry. Said to send money abroad we could make the case it will be challenged i know some are trying to push it and that would not be a good idea. Do the big banks also invested or should they be behind reform describing . Billy say no then you have to convince them but theyre not big Bank Customers and that is a crucial point. And his money when you see walmart taken down by the banks and the big banks shut it down. Komer is a very powerful institution that if the banks dont want you to, you dont. So to play around you get them on board. So the only valid opposition is the pay lending sector. Id want this to pass because of bad debts theyre not the customers that have left the market one as the banks to read what the government of all. So you have to do some tradeoff. One that could get the banks on board does the Community Reinvestment act requirements that said if you have a branch then you cannot exclude. To have a bank in a rich area to put the proverbial red wine around a community to not lend that. You have to win their if you lend in the Rich Community and they hate that. Personally and be willing to give up on that because as the matif then say we will take care of it. With the growing demand of Online Banking how does this settle into that . If you did it would have to have the only function function, the atm and online checking with that servicing option. And a lot of low income bilks livein the cash economy. That is ladies prepaid debit cards that you pay 5 to get the card than 3 every time 2 every time you use it into dollars to check your balance but a lot of money goes into it will allow them to use their debit card to buy things online. And allows them to have a digital currency. A when to set up my water there is a line of people trying to pare their water bill in cash. So now they turn the paycheck into cash it takes up the lunch hour. But all of mine go on to ottawa paper co that is another way to let them benefit from the time savings. Is one of my students. [laughter] is said the initial baking system took three years to do speculate how long have taken new system to become self sustaining . It is a 90 billion sector if they could get 10 percent of that or 5 right now is in the hall 13 billion. For some political reasons but also because the books dont match. With two were three years depending how they could get. But if they default on their treasury loan. If they cut costs to hold something works or do they add revenue . Every post abroad to the extent they make money is to financialservices. Nobody is making money through mail anymore. 11 billion ipo with 1 trillion in savings they sold off the wood is very profitable and a lot of people wanted a piece of it. Currently there are these institutions over businesses it would be hard to change public mindset . I dont always trust surveys the 90 percent of the respondents is the other aspect is how people feel at the post office. A lot of this feeling three angry but we think of the post office as a dinosaur not a shark people take the money at of the bank because they dont trust him anymore. That is very well aware. So maybe it isnt the place you want to be but not one that will screw you. People didnt trust the metal and a lot of stuff happened outside of it and there was a feeling that people would be comfortable there. And that was purposeful in the old days the way a bank would protect themselves would have been some buildings of marble and gold that was an economic decision we give so much money in the big so dont run because then it is over they dont actually have the money there. Said david gregg gold bars on the window to say we are fine. We have that right now with have fancy buildings and they feel uncomfortable. Paid a lenders on informality. Very big corporations that our profitable neon signs. Dirty on purpose. We are cool we are part of the community. We are cool. Not that i know that is where you buy pot. I have heard. [laughter] we are not a bank. The post office is closer to them than the bank. What kind of reactionary getting to this idea . So far senator boren has been early on. Very supportive. With the ranking democrat. Bernie sanders. And ralph nader so those who are focused about so it is better to do it for the postmaster general. They have not said either way. One. I have relatives that have fallen victim they dig themselves into a whole they cannot get out of. If they live paycheck to paycheck city said the purposes is to anchorage economy. They dont speak or think and longterm. It is very immediate. How did they encourage those people the way to manage their money better . And who would help them . If i go to mail a package i would not trust but maybe they would. I think a lot of people it isnt necessarily a lack of education but i dunno how to manage. But if i live in a paycheck to paycheck i would have more financial skills now with the buffer. So they express a higher awareness. I am not saying they are the most educated but they do know what they are getting into. That living paycheck to paycheck. How does this encourage savings . All that money came into the postal bank and the data shows there is a lot of money not in banks people who have money to save with no place to save that. Whether cash or prepaid debit card. So to have a place to save. But they have a small savings through the post office and they have more savers. They have a culture of savings. There is one historian the claims the postal bank network cause that so it is possible once you have a place to put your money but i cannot speculate. [applause] what i worry about is the pressure to pay the players more significant sums of money where you are bidding for a Great Quarterback linebacker so it bids up the price. Is not impossible we get to that model