New Orleans The rise of interstate banking since 1980 has led to countless consolidations as major money center banks have reduced headquarters locations and branches where customers can easily do financial business. The Wall Street Journal reported that 1700 branches closed in a one-year period highlighting a trend after acceleration up to 2009 when the banks competed for market share. In the last decade US banks have closed 9000 branches. According to the FDIC this was offset by smaller banks adding branches as they tried to move into the spaces left behind.
None of this is financial news. For years banks have claimed to ACORN, directly when we were negotiating with them about their community investments, that they “lose money” on individual accounts. Anyone with an account can testify to this as we are steadily pushed away from monthly printed statements and into on-line banking, along with constant e-marketing requests and efforts to upsell to other products. Minimum balance fees for accounts and exorbitant charges of overdrafts have pushed many lower income and working families completely outside of the regular banking system. For all of the big talk about financial education and literacy, the unbanked in the United States has been an unyielding problem even though there are claims that the number is falling. In 2017, the U.S. had 8.4 million unbanked households, or about 14.1 million adults.
There is a solution in a neighborhood near you and everyone else: postal banking. Democratic candidates including Senator Gillibrand from New York and Senator Warren from Massachusetts have come out in favor of postal banking.
So, what is postal banking. Simply put it would allow local post offices to offer banking services to families without accounts or credit cards. In many countries, like Japan and India, postal banking is a secure savings system. The Campaign for Postal Campaign has advocated using the postal system for check cashing, small loans, savings, and other basic financial services that are now either a void or filled by predatory businesses like payday lenders and check cashing facilities with exorbitant charges. We have worked closely with postal workers unions in the US and Canada to attempt to expand these services as part of our effort to beat back predatory operators.
Interviewing Mark Dimondstein, the president of the American Postal Workers Union in 2017 on Wade’s World left no doubt at the support of postal workers for expanding vital services both to more fully utilize facilities and to maintain work and financing for the USPS. Mehrsa Baradaran a law professor at the University of California at Irvine calls postal banking a “public option.”
It would be wonderful if postal banking finally received the attention it deserves as a support for all of the families that need accessible and affordable financial services.