Back to the future, using U.S. Post Office as Bank

If you’re not familiar with the movie “Back to the Future”, it is a fun flick where Michael J. Fox (the protagonist) joins forces with a “mad scientist” played by Christopher Lloyd. They use a DeLorean automobile as a time machine so that Fox can travel back to the 1950’s. Well, it appears that the U.S. banking system might travel back a bit in time in an effort to offer basic banking services to the public.

Once upon a time, the United States used its postal office system to allow citizens to save money! Isn’t that a novel idea!

So here’s an interesting development. Apparently there is some consideration and discussion occurring in the U.S.Congress regarding reinstating the use of the U.S. post office as a banking mechanism for those who do not “bank” with any of the chartered banking institutions. As an aside, I’m happy to hear that “the Congress” is doing something besides trying to impeach President Obama.

First a little history lesson:

The Smithsonian Museum offers a little insight into the past “banking” role of the postal office. Banking at the post office.

Slate.com offers commentary about our “postal banking” past and perhaps future.

For those who enjoy the nitty gritty details of the law, here’s a copy of the Postal Savings System Act of 1910.   Post Savings System Act of 1910

“One of the biggest problems in banking today is the large and ever-increasing population of the unbanked…” Here’s an essay by Mehrsa Baradaran, published in the Harvard Review, that explores the return to postal banking.

“Would the U.S. Postal Service Make a Better Banker for the Poor?”  Finally, here is an argument presented by Bloomberg Business News in 2014.

All in all the rationale for bringing back basic banking services to the U.S. postal system makes sense to me. Between the concern for TBTF* money center banks, no access to financial institutions in a locale or neighborhood, and perhaps onerous criteria required to open financial accounts at a bank preventing such access, using the Post Office to make a savings deposit as well as mailing a letter (the old-fashioned way) solves a pressing problem. With all the “talk” about easier access, better access, more access to education, jobs, transportation…you name it, this solution sounds like a no-brainer. And that of course depends upon the service being run honestly, rationally, and efficiently.

*too big to fail
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