In a press conference last week, a group of Cleveland-area elected officials and local labor leaders called on the U.S. Postmaster General to make cities and suburbs in Northeast Ohio the first test case for the system. According to figures from the Federal Reserve, some 22 percent of U.S. households, representing about 55 million adults, were considered unbanked or underbanked in 2018.* Those in the latter category may have an insured account, but they also use “alternative” financial services like check-cashing stores and payday lenders. As bank branches disappear from lower-income urban neighborhoods and rural areas, banking deserts dominated by predatory cash-advance stores have become an increasingly common feature of the American landscape. Thanks in part to Trump-era rollbacks of federal regulations, these payday loan operations and storefront car-title companies charge $8 billion in extra fees each year.
“I hope [the USPS] will use their current authorities to expand financial services, particularly in neighborhoods that are unbanked and are banking deserts where people are being raped by predatory lenders, auto loan sharks and firms that charge people 20 percent interest,” Representative Marcy Kaptur told the Cleveland Plain-Dealer
. “The American people will demand it.”
Why in the world would anyone in their right mind want to create a bank out of an organization that averages a $2 billion loss per quarter??