Melanie Long

Several Media Outlets Publish Melanie Long’s Article on a Return to Postal Banking

Wooster economics professor outlines how postal banking would benefit income inequality

WOOSTER, Ohio – Melanie Long, an assistant professor of economics at The College of Wooster, sheds light on an underpublicized aspect of income inequality while advocating for a return to postal banking in her latest piece, “COVID-19 Exposes Why the Postal Service Needs to Get Back Into the Banking Business,” first published by The Conversation on Wednesday.

The article was picked up by several media outlets, including the Houston Chronicle, Seattlepi.com, and Yahoo! News.

An overlooked aspect of the coronavirus pandemic has been its impact on individuals who are “unbanked,” an economist term for those who cannot access financial services because of the lack of a bank account, and it primarily affects communities of color. One example, many “unbanked” had to wait much longer, and in some cases are still waiting, for their economic stimulus checks from the federal government.

Long, an expert on financial exclusion, contends there is an answer to this problem. “Postal banking … could serve the unbanked and do so efficiently. While there are various ways to do this, a basic postal banking system would allow every United States Postal Service branch to act as a limited-service bank, offering services like checking and saving accounts, pre-paid debit cards, and small loans,” she wrote.

As a branch of the government, postal banking would not be concerned about rewarding investors, as opposed to a commercial bank, and past history and current practice in other countries demonstrates that it’s feasible, according to Long. In 1910, the U.S. Congress established the Postal Savings System to encourage citizens to put their money in financial services, and at its peak in 1947, it had $3.4 billion in deposits, but deposits steadily declined when commercial banks started offering higher interest rates. The Postal Savings System ended in 1967.

Today, with a decline in bank branches in low-income communities and USPS branches in “virtually every neighborhood,” Long argues that commercial banks and postal banks “can coexist,” which would “ensure fewer Americans are left behind.”

The Conversation is an independent and not-for-profit source of news, analysis, and commentary from academic experts.