The Postal Banking Solution

Bluff, New Zealand is the southernmost inhabited city in the Eastern Hemisphere. The post office there looks over the Foveaux Strait — if you were to sail south from the harbor, the next landmass you’d encounter would be Antarctica. Fewer than two thousand people live in Bluff, but any one of them can walk into the post office and cash a check or apply for a loan. Residents may be at the edge of the world, but thanks to the state-owned postal banking entity, Kiwibank, they still have access to basic financial services.

Meanwhile, the United States is riddled with what are called banking deserts — inhabited areas, many of them urban, where residents have no access to a bank. The problem got worse in the aftermath of the recession, when traditional banks started closing branches in low-income neighborhoods around the country. Many cash-strapped Americans were forced to turn to “alternative financial services” — that is, predatory payday lending and check-cashing operations, which offer small-dollar loans in a pinch. Known for hidden fees and exorbitant interest rates, these businesses don’t provide basic services like checking and savings accounts. They’re not banks, they’re shark tanks.

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