A Canadian article (which also might be found useful in the U.S.) extols the benefits of postal banking.
Why raise the subject of banking in a blog focused on truly affordable housing? Like all private sector services, conventional banks expect to make a profit on the transactions of their customers. The act of using a bank to help manage even a pittance of money cuts into the resources for essential food and shelter that leave the poorest teetering on the brink of homelessness and starvation.
According to reports, some eight million people in the U.S. either cannot afford a bank account or cannot maintain the minimum balance in their accounts required by profit-focused banks. But unlike conventional banks, Post Office banks have generally offered public services catering to the population as a whole without exception.
How valuable can postal banking be to a country? Both Canada1 and the U.S.2 thought it valuable enough until the 1960’s, when it was phased out in both countries.
Pilot projects are currently underway at Canadian and U.S. post offices to evaluate their potential.
The Canadian pilot project offers an opportunity to consider the benefits of a postal banking service in a modern context. Feel free to ignore the over-the-top title of the following article on postal banking that does not serve its in-depth (if boosterish) content well. Read more in SP: Postal Banking: Public Banks that Do Not Only Serve the Rich!
For more about the U.S. pilot, here’s an article from Next City: The Latest in Banking Reform for the People
Why post offices? Few publicly-owned retail services are as widespread as post offices, with outlets in even the smallest communities. As a result, the postal service has been a ready platform for public banking in many countries.
It is, however, not the only way public banking can be achieved. Many jurisdictions allow a banking service closer to private banking models, but with public ownership, and most importantly, public objectives. California has flirted with the idea of public banks for some time. Recent legislative changes have increased to possibility that such an endeavour might be successful3. Historically however, it has been difficult in America, unlike some other countries, to get public banks successfully off the ground. Currently, there is only one in the country4.
Footnotes
- This brief history of Canada’s Post Office Savings Bank comes from the Canadian Museum of History: The Post Office Savings Bank
- Read more at Slate: A Short History of Postal Banking
- Read more at Next City: California Has a Plan to Restore Trust in Banking
- Try: Public Banks: What Are They? What Might They Offer Affordable Housing
