The conservative case for post banking
The US Postal Service started offering it last month Check cashing services at locations in Metro Washington, Baltimore, and the Bronx. While only a pilot project in some markets, the program is a small step towards reintroducing the postal banking system that USPS discontinued in 1967.
Progressives have long seen post banking as a way to bring millions of people without bank accounts into the regular financial system. Because they have bad credit, struggle to hold a minimum balance, or don’t have a fixed address, these customers rely on non-banks like check cashers and payday lenders. Because of their high fees and interest rates, such transactions were designated for regulation when the Consumer Financial Protection Bureau was established in 2011.
Conservatives and libertarians have largely opposed these efforts, including proposals for a public alternative. The arguments refer to classic small-state issues: offering banking services through the post office would be expensive, unnecessary and compete unfairly with the private sector. There are also good reasons to doubt the Post Office’s ability to manage complicated products like loans. It can hardly deliver the post in some of the same markets earmarked for the new program.
In recent years, however, the right has engaged in a comprehensive reconsideration of the domain. As populists question traditional opposition to tariffs and industrial policy, they might also consider whether a scaled-down version of post banking makes sense in the 21st century. For all its shortcomings, the USPS has one advantage that private financial institutions lack: as a branch of national government, its banking activities would likely subject to the first additional article.
First Amendment protection means that Postbank customers cannot close their accounts or refuse to transact because they have been linked to controversial political activity. Particularly if it includes an online payment option, the post banking could be conservatives or other dissenters who are creating a de facto Social credit system. In contrast, private payment processors are cracking down on the use of their platforms for constitutionally protected, albeit unattractive, purposes.
Registered mail The New York Times, James Poulos recently defended Bitcoin and other cryptocurrencies as a means of protecting citizens’ private financial affairs from public influence. Paradoxically, banking with the state itself would have the same effect. Unlike PayPal accounts, the constitution cannot be terminated.