Banks have been consistently uninterested in providing financial services to poorer Americans, but others are increasingly jumping at the chance to do so. The latest is the United States Postal Service (pdf), whose inspector general published a paper last week detailing how serving the so-called unbanked with savings accounts and small-scale loans could provide a valuable public service while shoring up the finances of the vulnerable agency.
The Post Office’s proposal follows T-Mobile’s plan to offer some financial services to its customers, and Wal-Mart Stores has been offering similar services for several years, along with a few other companies whose main businesses are retail goods and services. These companies are stepping into the vacuum created as traditional financial institutions withdraw from serving unprofitable low-income areas. Banks closed almost 2,300 branches in 2012, and 93 percent of the closings since 2008 occurred in Zip Codes where the median income is below the national average. Payday lenders, pawn shops, and other exploitative businesses have been happy to step in, but the high costs of their services leave them open to competition, and the increasing interest of regulators leaves them vulnerable.
