Listen to this segment with Marc Armstrong
There was a time in the United States when you could walk into a post office to mail a letter and also do your banking. The Postal Savings System started in 1911 and allowed millions of Americans, many of them new immigrants, to save money. Although postal banking was shut down in 1967, at its peak the US postal service was holding $3.4 billion dollars worth of savings.
Today, sixty eight million Americans or about one in four households do not even have bank accounts. In January the Office of the Inspector General of the US Postal Service put forth a proposal to bring back banking services to postal customers. While bankers and payday loan companies vehemently oppose the plan, the United States Conference of Mayors at its annual meeting in June fully endorsed the proposal.
While there are 32,000 post offices in the country, 60% of them are located in areas that are called ‘bank deserts’ where there is only one bank or no banks at all. The postal service, which already provides money orders and transfers, could also provide small dollar loans, ATMs and online bill payment. Financial services provided by the post office could potentially generate up to $8.9 billion in revenue while also providing relief to the 12 million people who relay on payday loans with their exorbitant fees to survive.
GUEST: Marc Armstrong is the co-founder of the educational nonprofit Public Banking Institute and its sister advocacy organization, BankACT. Visit www.bankact.org for more information.