The fact that urban neighborhoods in this country are underserved by government and large corporations is immoral. Schools are overcrowded, grocery stores are not easy to find, crime goes unsolved, and bank branches barely exist in the less affluent areas of our cities. Predatory “payday lenders” are the rule, from Los Angeles to New York, Houston to Minneapolis, and every city in between. We as a nation need to address this urgently.
One idea that would help would be to bring back postal banking. From 1910 until 1966, anyone could open a small savings account at their local post office and have check cashing services. This Postal Banking System was instituted to stabilize the banking system from the panic of 1907, when many banks failed. William Taft got elected in large part by proposing this legislation. Taft’s postal banking idea was a real success for the country.
The Postal Banking System raised billions of dollars from small savers, and the post office also sold many U.S. Savings bonds through the bank to support the war effort in World War II. The program was very popular with new immigrants to the country, as they did not trust private banks, and the postal banks were backed by the full faith and credit of the United States.
This pandemic has hit the postal service hard, as well as the poorer urban communities. Re-establishing the Postal Banking System will help the unbanked population and the post office. It is a win-win. Unless, of course you are a predatory lender.