Postal Banking: An Idea Whose Time has Arrived!

by Pa Rock

Citizen Journalist

Yesterday I used this space to complain about a financial affront that is being perpetrated against my hometown by a large bank chain and the family of billionaires who own that business.  The town is Noel, a tourist community is southwest Missouri which today boasts several active canoe camps in and around the town as well as a large Tyson Foods poultry processing plant that is within in city limits and has a large payroll.  Noel currently has a population of approximately 2,100 individuals.

The financial affront being perpetrated against my hometown in the closing of the town's only bank - and the perpetrator of this dastardly deed is Arvest Bank, a chain of banks that has more than 270 branches across a large swath of Arkansas, Missouri, Oklahoma, and Kansas.  The Arvest chain, which began with the purchase of the old Bank of Bentonville Arkansas by the (Walmart) Walton family, is today wholly owned by the members of the Walton family.

Arvest announced recently that it will be closing thirty-one locations.  Noel will not be the only small town in the realignment that will lose its only bank.

Small towns, particularly those that are still economically viable like Noel, should have a bank.  Local residents need places that are easily accessible in which to deposit their savings, manage their checking, and make and repay loans - and hometown banks are convenient and logical places to acquire those services.  Banks are also important components of a community's identity, and if the local bank disappears, so too does an important piece of that community's character.

But the Walton's and their wholly-owned bank chain, Arvest, are closing Noel's only bank.  It's a cold, calculated business decision, a matter of dollars and cents that is not up for discussion or appeal from anyone outside of the corporation or the family.  The residents of Noel - and of the other communities affected by this "business" decision - will just have to find other places to conduct their financial affairs.

Communities identify with their banks.  I mentioned in yesterday's posting that they also identify with their post offices, and then I noted that there is a movement afoot in some political circles to promote the notion of Postal Banking, a concept whereby US post offices would begin providing some basic financial services to customers.  That idea may sound a bit radical in a country that has never experienced using its post offices for banking services, but currently over one hundred and thirty countries in the world are providing banking services through their post offices.  It is an idea that works - and works well.

The Campaign for Postal Banking describes the concept this way:

"Postal Banking is simply the provision of low-cost, consumer-driven financial services via the Postal Service.  Products and services could range from check cashing to bill payment to savings accounts to small-dollar loans. Postal Banking will benefit consumers who do not have access to traditional banks as well as those who would prefer a more public option.  Every other developed country in the world has postal banking.  The expansion of services would also strengthen our public Postal Service."

One major argument for Postal Banking is that it provides an easy way to save, and would especially benefit individuals who have no available banks - like impoverished communities that traditionally lack services, as well as economically viable communities, like Noel, that have lost their established banking facilities. Another advantage is that it would eliminate arbitrary and mean-spirited bank charges that traditionally prey on the poor.  It also might keep some people from falling into the clutches of predatory pay-day lenders.   And, the addition of a banking function would help to bring more people and business into America's struggling post offices.

Postal Banking would be good for Americans who are in need of more and better banking options, and it would help to save the US Postal Service.  It would be, in a very real sense, a win-win proposition!