Bring Back Postal Banking!

David Dayen has a nicely written piece up on Pacific Standard ("Signed, Sealed, Delivered") arguing that  a "two birds, one stone" solution exists within the current struggles of the United States Postal Service. He argues that we could improve the USPS' bottom line and strike at the heart of the challenges faced by unbanked and underbanked Americans by allowing the USPS to offer basic financial services.

The country has a real problem with people who lack access to the financial system, and who subsequently get shut out of all sorts of opportunities that increase social mobility. Postal banking could significantly increase that access, which in turn would put more money circulating in the economy. In addition, having a federal agency that would promote responsible savings makes sense in a society that’s too over-extended.

As Dayen notes, the National Association of Letter Carriers is on board with the change. He also quotes Princeton professor Sheldon Garon arguing that effective models exist in other countries and that the track record of postal savings would be applicable and beneficial to the US. That's an argument that we're familiar with, as we've hosted Shel Garon twice in the recent past, once to discuss his book on savings, Beyond Our Means: Why America Spends While the World Saves, and once specifically to discuss the very idea of restoring the functions of postal banking to the USPS. We co-sponsored "Saving (at) the Post Office: Can We Create A Nation of Savers and Save the USPS?" along with the Congressional Savings and Ownership Caucus in June of 2012.

Dayen's analysis is right on, this is a promising idea that would offer some financial benefit to the USPS and a significant social benefit to America.  He's also right that there are vested interests that are dug in against such a development. Who is going to mobilize and advocate for an idea like this one? In the current context of our dysfunctional politics, there's a win-win here that's almost certain to get passed over. Still, I recommend his piece as a great introduction to the issue. If you want to learn more about the history of postal savings, both in the US and abroad, check out Shel Garon's talk from last summer, and forgive the audio quality, such is the nature of recording events in the more ancient portions of the US Capitol buildings.