Stumbled on a conversation today at Netroots Nation that is quite intriguing: using the post office as a bank outlet. Guess what? It existed decades ago. It could happen again–but, you’ll never guess who hates the idea? OK, yup.

I’ll write a bit more on this soon. But, the basic idea is simple, as outlined in this paper by Professor Mehrsa Baradaran:

The post office could offer check cashing and payday lending services much like those offered by fringe banks, but at a much lower cost. It could also offer them without all the documentation and formal barriers of banks. There are currently non-banks, other than fringe lenders, starting to offer these products because they do not involve sophisticated credit analysis or any regulatory support, such as FDIC deposit insurance.

This idea is not new but it also has been given a bit of institutional support from the Inspector General of the U.S. Postal Service. In a recent white paper, he wrote:

Millions of Americans do not have a bank account, or use costly services like payday loans and check cashing exchanges just to make ends meet. The entire underserved population comprises more than a quarter of all U.S. households—some 68 million adults. They are an economically diverse mix of working and middle class families, poor and unemployed people hurt by the recent economic crisis, young people, immigrants, and others who are trying to make it paycheck to paycheck. Together, they represent a huge market. In 2012, they spent about $89 billion just on interest and fees for alternative financial services.

The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector.

Wonder what people would do if they could never have to walk into a Citibank again.