EVERYONE NEEDS A SAFE PLACE TO KEEP THEIR MONEY.

VAULT · 03 DEFEATING THE EPSTEIN CLASS

Published by Langhorne P. Breedlove

MONDAY, NOVEMBER 9, 2026 · 1:57 AM ET

Tags: Public Banking · Financial Inclusion · Consumer Protection · Postal Banking · Payments

Dear fellow American proletariat: Try surviving modern life without a bank account. Your employer wants direct deposit. Your landlord wants electronic payment. The utility company may charge extra to accept your money in person. Meanwhile, a financial institution can look at the very person who most needs a safe account and decide that their balance is insufficiently interesting.

This essay examines a proposed universal public banking-access guarantee. The goal is an affordable, safe way for every eligible resident to receive wages and benefits, hold deposits, pay bills, withdraw cash and obtain human help. That does not automatically require one national government-owned bank. Partnerships with insured banks and credit unions, postal access points, state-owned institutions and more direct public options have different legal, financial and operational tradeoffs.

ROOTS & HISTORY

Americans have already tried publicly organized savings infrastructure. The Postal Savings System began operating in 1911 and offered a government-backed means to save through post offices. Congress ended new deposits in 1966, with the system winding down in 1967. It was a savings arrangement—not a complete modern checking, lending and payments network. Invoking that precedent is useful history, not proof that opening a checking account at every post office would be free or effortless today. (Source 01)

The Nonpartisan League helped bring the Bank of North Dakota into existence in 1919. The state-owned bank opened on July 28 of that year with $2 million in capital and was designed in part to support North Dakota's economic and financial system. Its role is largely institutional and partnership-based; it is not an existing nationwide branch network offering universal household accounts. A state bank shows that public ownership is possible, not that its model automatically fits every state or every service. (Source 02)

THE NUMBERS BEHIND THE PROBLEM

The FDIC's 2023 National Survey of Unbanked and Underbanked Households found that 4.2% of U.S. households, about 5.6 million, were unbanked: nobody in the household had a checking or savings account at a bank or credit union. Another 14.2%, about 19.0 million households, were underbanked under that survey's definition: they had an account but used specified nonbank financial services during the preceding year. These are household measures, not a count of unbanked individual adults, and 'underbanked' does not mean every household used every costly service. (Source 03)

The FDIC identified insufficient money to meet minimum-balance requirements as the most commonly cited main reason unbanked households gave for lacking an account; distrust of banks was the next most commonly cited reason. In 2023, surveyed unbanked rates differed considerably among racial, ethnic and income groups, with the causes requiring care rather than a one-word explanation. (Source 03)

The Federal Reserve's May 2026 report, covering 2025, found 6% of adults were unbanked under a different definition that considers whether a respondent or their spouse or partner had checking, savings or a money-market account. This is not evidence that the household unbanked rate jumped from 4.2% to 6%: the denominators, units, survey periods and account definitions differ. The report also documents barriers for low-income adults and financial losses from fraud. (Source 04)

WHAT WOULD UNIVERSAL ACCESS MEAN?

A BASIC ACCOUNT THAT IS ACTUALLY USEFUL

AP could define a universal basic transaction-account standard: no minimum ongoing balance, no overdraft or insufficient-funds fees, clear low or zero monthly charges, direct deposit, bill payment, access to cash, a debit or equivalent payment mechanism, accessible customer support and straightforward account closure. The Bank On National Account Standards for 2025–2026 already illustrate a practical voluntary benchmark: an opening deposit of no more than $25, tightly limited maintenance fees and no overdraft or NSF fees. AP could go further by subsidizing qualifying no-fee accounts while requiring transparent service metrics. (Source 05)

A REAL PLACE TO TALK TO SOMEONE

A smartphone application is convenient until the phone is lost, service disappears, a scam locks the account or an older customer needs help. A universal model should permit in-person or assisted service through participating credit unions, banks, community organizations and potentially post offices, with attention to rural distances, disability access, language and Tribal sovereignty. A postal counter providing enrollment help is not the same thing as USPS itself becoming a chartered bank; Congress would need to define that distinction.

SAFE DEPOSITS & HONEST DISCLOSURE

Existing FDIC insurance generally covers deposits at an insured bank up to $250,000 per depositor, per insured bank, per ownership category. Credit unions have a separate federal share-insurance framework for qualifying institutions. An AP public-access model must explain precisely who holds the deposit, who insures it, what happens during failure and whether a partner account has pass-through coverage. A government logo should never substitute for a legally valid insurance promise. (Source 06)

FASTER PAYMENTS WITHOUT AUTOMATIC SURVEILLANCE

FedNow offers instant-payment infrastructure to participating financial institutions, not direct accounts for the general public. A universal-access system could encourage participating account providers to deliver reliable payment services, with error resolution, fraud reporting, privacy and accessible alternatives to digital-only transactions. This does not require a central-bank digital currency, nor does it authorize an unmonitored database of every purchase. (Source 07)

FOUR DIFFERENT WAYS TO DELIVER IT

OPTION ONE · PARTNER WITH INSURED INSTITUTIONS

The least structurally disruptive approach would contract with willing regulated banks and credit unions to offer qualifying accounts nationwide, using a public subsidy where the actual cost of serving customers exceeds sustainable fee revenue. Contracts should prohibit discriminatory access, require service standards and publish outcomes. This approach leverages existing infrastructure but can leave gaps where no participating institution can reach a resident.

OPTION TWO · POSTAL SERVICE ACCESS POINTS

A narrower postal proposal would allow designated post offices to help residents open or service accounts at participating financial institutions, subject to authorization and negotiated responsibility for staffing, cash handling, identity verification and fraud controls. A broader postal bank would be a distinct legislative and financial undertaking. The history of postal savings is evidence of precedent—not a blueprint for instant nationwide implementation. (Source 01)

OPTION THREE · STATE & REGIONAL PUBLIC BANKS

State-chartered public banks could support local institutions, hold qualifying public deposits or offer selected services under each state's applicable laws. North Dakota provides a long-running example, but policymakers would need to specify capitalization, management independence, credit risk, oversight, insurance eligibility and relationship with community banks. Public ownership does not repeal the need for competent underwriting. (Source 02)

OPTION FOUR · DIRECT FEDERAL RETAIL ACCOUNTS

Allowing ordinary people to hold accounts directly with a Federal Reserve institution would require a major statutory change: under current law, individuals cannot hold such accounts. A proposal sometimes called a FedAccount is therefore not just a software update or a switch someone at the Federal Reserve can flip. It implicates financial intermediation, bank deposit funding, privacy, customer service, cyber resilience and public governance. (Source 08)

THE CONSUMER PROTECTIONS

Access without recourse is not inclusion. The program should guarantee readable account terms, transparent fees, a functioning dispute pathway, fair and lawful identity checks, accommodation for people without conventional documentation, and procedures to reopen or replace accounts after mistaken closure. Providers must meet applicable anti-money-laundering, customer identification and sanctions requirements; universal access does not mean anonymous banking or an exemption from lawful controls.

Data collection should be proportionate. A person who opens a basic account to cash a paycheck should not have to authorize unrelated advertising profiles. Fraud investigation, identity verification and cybersecurity protections should be carefully separated from commercial exploitation of transaction data. Public providers and private contractors should face enforceable privacy rules and independently assessed security.

THE ONE-YEAR & TEN-YEAR LEDGER

A basic-account guarantee and the creation of public banks have very different budgets. To show the scale of a partner-account subsidy without pretending to know exact adoption, suppose 5 million qualifying accounts receive an average $60 annual service payment to their regulated provider. That would cost $300 million in direct support per year. Add an illustrative $100 million annual federal administration, consumer-help and evaluation budget; total recurring outlays would be $400 million. Assume an additional $200 million of startup procurement, systems and outreach in year one. The arithmetic gives $600 million in first-year spending and an undiscounted $4.2 billion over ten years if the annual costs remain flat.

Those figures are deliberately illustrative, not an FDIC estimate, adoption forecast or Congressional Budget Office score. A 10 million-account version using the same $60 payment would cost $600 million in direct annual account support before administration. A 2 million-account version would cost $120 million. The actual cost could be lower or higher depending on participation, account usage, fraud losses, branch assistance, interchange or other revenues, contract terms and operational safeguards.

A capitalized public bank must be modeled separately: paid-in capital is a fiscal use of funds but not automatically an operating expense; deposits are liabilities of the institution, not free government revenue; loans create assets and credit risk; and loan losses can affect taxpayers. A responsible ten-year comparison should show the existing-law baseline, new appropriations, startup infrastructure, recurring operations, insurance or guarantee exposure, projected receipts and losses, financing costs, interactions with existing accounts, and uncertainty ranges. Do not count a deposit balance as a fiscal saving.

WHAT COULD GO WRONG?

Poorly designed public accounts might lose money, allow fraud, deliver weak customer service or crowd out small financial institutions. Subsidies to private providers might become payments for customers they would have served anyway. A direct federal model could shift deposits away from conventional banks, with consequences for credit provision that deserve serious modeling. Postal expansion could strain an already complicated operating network.

Financial inclusion also cannot be measured solely by accounts opened. Dormant accounts, unexpected closures, inability to withdraw cash, weak dispute resolution and unaffordable credit can leave people functionally excluded. The FDIC's underbanked category illustrates why ownership alone does not tell the full story. An evaluation must compare direct public provision, competitive contracted accounts, Bank On-style standards, community-bank partnerships and targeted subsidies rather than assume one organizational form always wins. (Sources 03, 05)

HOW TO MEASURE SUCCESS

Track account openings and continuing active use, actual household fees, direct-deposit access, payment failures, fraud reports and recoveries, cash-access distance, complaint resolution, involuntary account closures, provider participation and cost per sustained active account. Publish privacy-protected breakdowns by income and geography, with special attention to rural, Tribal and underserved communities. Independent evaluation should test whether formerly unbanked households actually experience lower financial-service costs and greater stability.

THE POINT

A safe account should not be treated as a reward for already having money. Nor should a public option be assumed efficient merely because it bears a public seal. A useful guarantee must be affordable, accessible, insured or otherwise clearly protected, well governed and tested against the alternatives.

A republic that can send money around the world in seconds ought to be able to help somebody across town deposit a paycheck without paying a toll to exist.

SOURCES & FURTHER READING

01 · Smithsonian National Postal Museum — The 20th Century: Postal Savings System; historical chronology.

https://postalmuseum.si.edu/the-20th-century-postal-savings-system

02 · Bank of North Dakota — About BND; history and public ownership.

https://bnd.nd.gov/about-bnd/

03 · Federal Deposit Insurance Corporation — 2023 FDIC National Survey of Unbanked and Underbanked Households; released November 12, 2024.

https://www.fdic.gov/household-survey

04 · Federal Reserve Board — Report on the Economic Well-Being of U.S. Households in 2025, Banking; May 2026.

https://www.federalreserve.gov/publications/2026-economic-well-being-of-us-households-in-2025-banking.htm

05 · Cities for Financial Empowerment Fund — Bank On National Account Standards, 2025–2026.

https://joinbankon.org/wp-content/uploads/2022/08/Bank-On-National-Account-Standards-2023-2024.pdf

06 · FDIC — Deposit Insurance at a Glance; coverage rules.

https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance

07 · Federal Reserve Board — FedNow Service Frequently Asked Questions.

https://www.federalreserve.gov/paymentsystems/fednow_faq.htm

08 · Federal Reserve Board — Does the Federal Reserve Maintain Accounts for Individuals?

https://www.federalreserve.gov/faqs/does-the-federal-reserve-maintain-accounts-for-individuals-can-individuals-use-such-accounts-to-pay-bills-and-get-money.htm

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WE ARE ONE.  ·  E PLURIBUS UNUM.