The reason why this would be so useful in the U.S. is that somewhere between 20 and 40 percent of the population has to rely on check-cashing or payday-lending services, which in some places charge usurious rates that send people into spirals of recurring debt. Mehrsa Baradaran, a professor at the University of Georgia School of Law and the author of How the Other Half Banks, touched on the promise of postal banking in a book excerpt published in The Atlantic:
The basic idea of modern postal banking is a public bank offering a wide range of transaction services, including financial transactions, remittance, savings accounts, and small lending. These institutions would remain affordable because of economies of scale and because of the existing postal infrastructure in the U.S. Plus, in the absence of shareholders, they would not be driven to seek profits and could sell services at cost.In her essay, Baradaran made the point that the Federal Reserve helps struggling banks through temporary credit crunches—so why doesn’t the government treat struggling individuals the same way? It’s not unheard of in the U.S.; in 1910, William Howard Taft introduced a postal-savings system for new immigrants and the poor that lasted until 1967.
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