Post Office Banking: Why the Hell Not?

If in fact 68 million U.S. adults live in unbanked households, why not let the US Postal Service provide basic financial services? Not, it seems to me, either checking accounts or loans – USPS isn’t really equipped to deal customers writting NSF checks or with loan underwriting and chasing defaulting borrowers, though it might allow real banks to use its buildings as branches – but it’s hard to see what goes wrong with allowing people to establish accounts into which they can deposit cash or checks and draw against them with debit cards. Those buildings – a third of them in ZIP codes without bank branches – and the trust of the public, are two huge assets, and providing simple financial services to people whom the banks don’t want to serve seems like a good use of those assets. Other than interfering with glibertarian dreams of shutting down USPS entirely, I can’t see much of a downside.

[Cross-posted at The Reality-Based Community]

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Mark Kleiman

Mark Kleiman is a professor of public policy at the New York University Marron Institute.