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The United States has a postal system that is supposed to be self-financing (even after pre-paying postal workers’ pensions) and a poor population that has been ignored by the official banking industry (and therefore is prey to the growing cash-checking and payday-loan industry).
So, the U.S. Postal Service’s Office of the Inspector General [pdf] has come up with the idea of the USPS stepping into the breach by providing financial services to poor people, thus killing two birds with one stone: improving the postal service’s finances on the basis of financial fees paid by poor people who increasingly live in bank deserts.
Elizabeth Warren supports the idea (because she sees it as providing “access to affordable and fair financial services”) and, not surprisingly, the banking industry condemns it (creeping socialism and all that).
Adam Levitin, appropriately, suggests caution:
It is hard to make low-income consumers—like many of the unbanked and underbanked—into profitable financial services customers. That is one reason why so many are unbanked.
This points to a real tension in any sort of postal banking proposal: to the extent that a postal banking system is designed to provide low-cost services to consumers, it is potentially at odds with the USPS’s need to find new revenue sources. Put another way, is the mission of a postal bank profit or financial inclusion?