127 Harv. L. Rev. F. 165 (2013-2014)
It's Time for Postal Banking

handle is hein.journals/forharoc127 and id is 167 raw text is: IT'S TIME FOR POSTAL BANKING
Mehrsa Baradaran*
One of the biggest problems in banking today is the large and ever-
increasing population of the unbanked - those who are not gaining
the benefits of the regulated banking system and must rely on high-
cost fringe lenders to do simple transactions like cash their paychecks.
The Federal Deposit Insurance Corporation and the Consumer Finan-
cial Protection Bureau have listed this problem as a top agenda item.1
After decades of unsuccessful regulatory proposals, the solution may
finally be at hand. On January 27, 2014, the Office of the Inspector
General of the U.S. Postal Service (USPS) released a white paper that
proposed that the USPS consider offering financial services to the
underbanked.2 Senator Elizabeth Warren has also publicly expressed
support for the idea.3 The proposal was immediately criticized by the
banking industry as the worst idea since the Edsel.'4 The main stat-
ed concern is that the Post Office lacks the institutional capacity to
provide financial services.5     But anticompetitive concerns -        namely
that a large, well-funded competitor will cut into banks' business -
likely play a role too, as they did in 2005 when Walmart attempted to
obtain a banking charter.6
As I have written previously,7 and banking-industry concerns not-
withstanding, the USPS is in a unique position to provide much-
needed financial services for the large population of unbanked or
Assistant Professor of Law, University of Georgia School of Law.
1 See Advisory  Committee on   Economic Inclusion, FED. DEPOSIT  INS. CORP.
http://www.fdic.gov/aboutcomein (last updated Feb. 14, 2Q14) (outlining the Committee's ongoing
initiatives to expand access to underserved populations); Kelly Thompson Cochran, Fall 2013
Rulemaking  Agenda, CONSUMER    FIN.   PROTECTION    BUREAU    (Dec.  3,   2013),
http://www.consumerfinance.gov/blog/category/rulemaking/.
2 U.S. POSTAL SERVICE, PROVIDING NON-BANK FINANCIAL SERVICES FOR THE UN-
DERSERVED (2014), available at http://www.uspsoig.gov/sites/default/files/document-library-
files/2or4/rarc-wp-I4-007.pdf.
3 Sen. Elizabeth Warren, Coming to a Post Office Near You: Loans You Can Trust, HUFFINGTON
POST (Feb. r, 2014), http://www.huffingtonpost.com/elizabeth-warren/coming-to-a-post-office-
n-b_4709485.html.
4 Rachel Witkowski & Kevin Wack, Post Office Offering Loans Is 'Worst Idea Since the
Edsel':   Banks,     AM.     BANKER       (Jan.    27,    2Q14,    4:57    PM),
http://www.americanbanker.com/issues/r79- 8/post-office-offering-loans-is-worst-idea-since-the-
edsel-banks-io6523 r.html. The Edsel was a famous Ford marketing disaster.
5 Id.
6 Michael Barbaro, Bankers Oppose Wal-Mart as Rival, N.Y. TIMES (Oct. 15, 2005),
http://www.nytimes.com/2005/ro/r5/business/r5walmart.html.
7 Mehrsa Baradaran, How the Poor Got Cut Out of Banking, 62 EMORY L.J. 483 (2o13).

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