'Postal banks helped people of little means to be able to save a few hundred dollars' - Generocity Philly


Jul. 9, 2021 3:39 pm

‘Postal banks helped people of little means to be able to save a few hundred dollars’

Two members of the Generocity community shared their enthusiasm for the idea of postal banking in response to our daily newsletter's question yesterday.

(Photo by Diego De Alba on Unsplash)

How would you feel about being able to do your banking at your local post office?

That’s the question we posed to our community yesterday (via our daily newsletter) after having published a guest column by researchers who say that reverting to the practice of postal banking — which was available to Americans until 1967 and is still popular in the United Kingdom and France — could provide a financial lifeline to the millions of Americans without a bank account.

Through their research the pair discovered that nationwide about a quarter of U.S. census tracts that have a post office don’t have a community bank or credit union branch.

“Lack of affordable banking creates real hardships that disproportionately hurt low-income Americans and communities of color,” wrote Terri Friedline and Amerya Pawar. “In 2019, about 7.1 million Americans lacked a bank account and another 24.2 million are considered ‘underbanked,’ which means they use other more expensive services like payday lenders and stores that cash checks for a fee to meet their financial needs.”

So how did our community feel about postal banking?

“I would love to see this take hold,” Ash Kumar wrote.

Kumar wondered also whether a return to postal banking could help keep the USPS more financially solvent — a question that merits further research.

Another respondent, Constance Bille, helped flesh-out the benefits postal banking historically offered.

“The restoration of basic post office banking services has been advocated by the postal workers union and progressive advocates for decades,” Bille told us via email. “It was eliminated by pressure on Congress by the fine folks known as ‘pay day lenders’ so they could move into poor unbanked communities and charge rapacious interest rates on small loans.”

The banks have left those communities, and do not make personal loans in small amounts anyway, she added. “Postal banks helped people of little means to be able to save a few hundred dollars. Today’s big banks penalize people who have small deposits — they charge fees higher than interest rates for the ‘privilege’ of holding your cash while you try to save.”

From our Partners

Postal banking is a component of the public banking movement, which Bille — the founder of the Philadelphia Public Banking Coalition — says has been gaining momentum nationwide, and in Philadelphia, where City Council currently has a bill pending to establish a public bank.


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