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Postal Banking

posted by Adam Levitin

I've got an op-ed about postal banking in today's American Banker.  Basic point:  there's a tension between doing postal banking to generate revenue for the Post Office and doing postal banking for financial inclusion.  But it's an idea worth exploring.


Mehrsa Badaran, a professor at the University of Georgia, argued for postal banking in a 2012 paper that was later published in the Emory Law Journal. See http://ssrn.com/abstract=2056593,

The PRC ruled in 2008 that prepaid cards exceed the USPS's statutory authority (order 154), so it would require an act of congress. I don't think anyone would dispute that that is vanishingly unlikely.

Good point JPE. It is interesting to note as Order 154 does, that until 2003, the USPS did offer some prepaid cards (a product had to be offered in 2006, however, to be grandfathered in). I wouldn't expect Congressional action any time soon, but stranger things have happened, and when House members are faced with job loss in their districts from postal branch closings, they might decide that reelection comes before ideology.

Interesting stuff. Is it just me, or is the survey that runs alongside your article remarkably biased?
"Would a postal banking system pose a serious threat to banks?
Yes — A subsidized bureaucracy is the last thing the industry needs to compete against these days
No — The post office can’t even deliver mail efficiently, much less banking services
Depends — The post office would be welcome if it lowered the pressure on banks to take on money-losing customers"

Seems like all of those answers strongly lean toward the perspective that "the current banks are good and deserve all of the love and support we can give them in their never-ending struggle against GOVERNMENT."

Maybe I'm imagining things.

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