WE USED TO PUT SAVINGS BEHIND THE STAMP COUNTER.

VAULT · 03 DEFEATING THE EPSTEIN CLASS

Published by Langhorne P. Breedlove

MONDAY, NOVEMBER 9, 2026 · 2:04 AM ET

Tags: Postal Banking · Financial Inclusion · Public Services · Banking History · Consumer Protection

Dear fellow American proletariat: There was a time when an American could walk into a post office, buy a stamp, and put savings in a federally backed account. Today, a person can mail a package across the country from that counter but may have to travel farther—or pay a fee—to deposit a paycheck. The question is not whether the post office can become a Wall Street bank overnight. It is whether its existing public reach could help people use safe, ordinary financial services.

American Proletariat's broader proposal is universal public banking access. Postal banking is one possible delivery method, not a synonym for nationalizing all bank deposits. A post office could serve as an enrollment and transaction point for accounts legally held at insured institutions; a fully USPS-operated retail bank would be a substantially different project requiring expanded authority, capital, regulation and operational capacity.

ROOTS & HISTORY

Congress authorized the Postal Savings System in 1910, and the first postal savings depositories began operations in January 1911. It offered government-backed savings through selected post offices, particularly useful to small savers, immigrants familiar with postal savings abroad, and communities uneasy about private banks. Initial deposits could be as little as one dollar; savings stamps helped customers accumulate smaller sums. Early accounts paid two percent interest and faced deposit ceilings. (Sources 01, 02)

The original design was deliberately constrained. Deposits were largely redeposited into local banks, with reserves and government securities also used, rather than transformed into an unrestricted national lending empire. The system did not offer the full suite of contemporary checking accounts, debit cards, instant transfers or insured consumer loans. It supplied a particular public savings service during a particular historical period. (Source 02)

Postal savings grew during financial instability and peaked around $3.4 billion in 1947, according to the Smithsonian's National Postal Museum. As FDIC-backed private banking became more widely available and alternative savings products offered better returns, the system declined. New deposits ceased April 27, 1966, and it officially ended July 1, 1967. Banking interests had also opposed expansion of postal savings, a conflict documented in historical scholarship, but competition was not the only reason the system closed. (Sources 01, 03)

SO WHAT DOES THE POST OFFICE DO NOW?

The Postal Service already issues domestic money orders and cashes its own valid money orders, subject to identification and local cash availability. USPS says a domestic money order can be issued for up to $1,000, and that customers can purchase one with cash or a debit card, not a credit card. That is an important existing financial service, but a money order is not a checking account, does not pay interest and does not confer a credit line. (Source 04)

USPS reported 30,972 Postal Service-managed retail offices for fiscal year 2025, alongside other contract and community facilities. Its wider reported retail network had 32,907 total offices, stations and branches under the annual-report accounting categories. Numbers differ according to what counts as a location; no responsible financial plan should promise account services in every reported site without checking staffing, cash handling, connectivity and legal agreements. (Source 05)

A September 2026 USPS Inspector General report said the Postal Service processed 1.1 billion retail transactions across about 31,000 locations in fiscal 2025. Nearly half were non-revenue transactions such as package pickups or address changes. This is a reminder that a public counter already carries substantial workloads. New financial services might produce revenue, but they could also create queues, cash-security risks, service delays and added personnel costs. (Source 06)

WHY THE QUESTION STILL MATTERS

The FDIC's 2023 national household survey found that 4.2 percent of households, approximately 5.6 million, had no checking or savings account at a bank or credit union; 14.2 percent, approximately 19 million, were underbanked under the survey's specified nonbank-service definition. These are distinct household categories—not numbers of individual adults, and not proof that all would enroll in a postal account. (Source 07)

Lack of enough money to meet minimum-balance requirements was the most commonly cited main reason for being unbanked in that survey; distrust of banks was the second most commonly cited. An accessible counter may help, but simply replacing a commercial sign with a postal eagle will not overcome high fees, documentation barriers, mistaken account closures or distrust unless the account terms and customer protections actually change. (Source 07)

FOUR WAYS POSTAL BANKING COULD WORK

ONE · POSTAL ENROLLMENT FOR INSURED ACCOUNTS

Under a limited partnership model, selected postal locations could help people apply for basic transaction accounts offered and held by participating insured banks or credit unions. The financial institution would remain responsible for deposits, applicable insurance, payments, dispute resolution and prudential supervision. USPS would be paid for defined enrollment or transaction services. Whether current law authorizes a given service or requires amendment must be established before rollout.

TWO · CASH, PAYMENT & BILL-PAY SERVICES

Another model would expand permitted low-cost financial transactions, such as eligible bill payment or cash-to-account transfers, through licensed partners. Existing postal money orders provide useful operational experience, but added transactions would require specific fraud controls, reconciliation, equipment, security procedures and transparent pricing. Neither check cashing nor remittance processing should be described as risk-free.

THREE · PUBLICLY BACKED SMALL-SAVER ACCOUNTS

A new statutory postal savings program could be designed to provide government-backed low-balance savings, with careful rules governing account limits, interest, liquidity, deposit investment, financial reporting and customer service. This would revive a function, not automatically revive the exact 1911 system. Federal deposit backing would need its own legal and fiscal treatment rather than a casual promise that every dollar is covered somehow.

FOUR · A COMPLETE USPS RETAIL BANK

A full bank operated by the Postal Service could conceivably offer deposits and payments and, if lawmakers authorized, credit. But this is the most institutionally demanding design: it needs capital, banking supervision, loss reserves, anti-money-laundering compliance, cybersecurity, skilled personnel and governance insulated from lending favoritism. It is a different proposition from asking a clerk to help someone open a partner credit-union account.

THE LAW IS NOT A FOOTNOTE

Current 39 U.S.C. §404(e) generally limits USPS nonpostal services to specifically continued preexisting offerings or services authorized by chapter 37. The Postal Regulatory Commission has described the constraints on new nonpostal services. A nationwide modern retail banking system is not already authorized merely because the historical Postal Savings System once existed. Congress would have to define the powers and obligations for services outside existing authority. (Sources 08, 09)

The 2022 Postal Service Reform Act broadened specified intergovernmental service possibilities, but that does not amount to a blanket charter for a retail deposit bank. Postal employees should not be ordered to act as lenders or financial advisers without training, suitable staffing, employment protections and a clear allocation of legal responsibility. (Sources 08, 09)

WHAT THE OLD RESEARCH ACTUALLY SAID

A 2014 USPS Inspector General white paper examined nonbank financial services for underserved households, including possible partnerships with financial institutions. It cited $89 billion in 2012 alternative-financial-service fees and interest and suggested that capturing ten percent of that amount could hypothetically yield $8.9 billion in annual postal revenue. That was an historical opportunity scenario based on 2012 spending—not an audited 2026 revenue forecast, a profit estimate, or proof that such services would pay for themselves today. (Source 10)

The report's narrower partner-service emphasis is easy to miss. Its authors did not propose that USPS immediately become a stand-alone national deposit bank. That distinction matters, because the cost, risks and legal authority of check cashing, account enrollment, deposit-taking and lending differ dramatically. (Source 10)

THE ONE-YEAR & TEN-YEAR LEDGER

Consider a hypothetical limited pilot at 500 postal retail locations. Assume $150,000 per site in one-time secure equipment, modifications and training, for $75 million initial site investment, plus $25 million in national systems and startup oversight. Assume $200,000 annually per site for incremental staff and operational costs, or $100 million, plus $20 million annually in national oversight, technology maintenance and evaluation. First-year gross spending would be $220 million, with $120 million annually thereafter. Over ten years, holding all assumptions flat and ignoring inflation, gross spending would total $1.3 billion. These are illustrative planning figures, not a USPS budget request, forecast or independently scored legislation.

At an assumed 100 locations, the same site-level operating rate would yield $20 million in site expenses annually before national overhead; at 1,000 locations, $200 million. Service-fee revenues, account-provider payments, procurement costs, cash-security needs and liability exposures must be separately modeled. The pilot should not assume that five hundred sites automatically mean five hundred successful financial-service markets.

A ten-year public ledger must show existing USPS revenue and costs separately from incremental banking-related costs, deposit-account ownership and insurance, paid partner compensation, initial site investment, staffing, compliance, fraud losses, cyber resilience, public appropriations, fees and plausible revenue ranges. Deposits are a financial institution's liabilities, not free program revenue. A projected decrease in payday lending cannot be booked as a government saving without credible causal evidence.

WHAT COULD GO WRONG?

Postal lines could grow longer. Cash handling and fraud could increase. A government-backed product might compete with small credit unions or community banks without delivering better service. A public bank could face political lending pressure, operational losses and privacy concerns. And a partner program could become one more corporate sales counter funded by public property.

Opponents may prefer expanding low-fee checking accounts through existing banks and credit unions rather than creating postal financial services. Others emphasize the post office's physical presence, especially where commercial branches are sparse. Both approaches require evidence about sustained account use, actual household costs, staffing burdens, geographic access, customer satisfaction and taxpayer exposure. A policy that merely announces a new logo cannot answer those questions.

MEASURE THE RESULTS

A pilot should publish participation, account openings, active accounts at six and twelve months, average customer fees, service times, payment errors, fraud incidents and recoveries, complaint resolution, rural and Tribal access, staffing impacts, actual USPS revenue and incremental public cost. Disaggregate outcomes with privacy safeguards, and compare results with similar communities receiving strengthened conventional low-cost banking services. Expand only when the evidence supports expansion.

THE POINT

The United States once used its post offices to help people save securely. It can debate whether some modern banking services belong there again without inventing either a mythical golden age or an effortless national rollout. The enduring question is whether ordinary people can receive a paycheck, keep their savings safe, pay bills and get help without surrendering a remarkable share of what little money they have.

The post office knows how to deliver a letter to nearly any address. That is an extraordinary public asset. Turning it into better financial access is a policy challenge worth measuring, not a magic trick accomplished by adding a teller window.

SOURCES & FURTHER READING

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

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

02 · Smithsonian National Postal Museum — Postal Savings Certificate of Deposit, historical collection essay, August 2006.

https://postalmuseum.si.edu/collections/object-spotlight/postal-savings-certificate-of-deposit

03 · Christopher W. Shaw — “Banks of the People”: The Life and Death of the U.S. Postal Savings System, Journal of Social History, 2018.

https://academic.oup.com/jsh/article-abstract/52/1/121/4110186

04 · United States Postal Service — Money Orders, current consumer rules and transaction limits.

https://www.usps.com/shop/money-orders.htm

05 · U.S. Postal Service — Fiscal Year 2025 Annual Report to Congress, retail network counts.

https://about.usps.com/what/financials/annual-reports/fy2025.pdf

06 · USPS Office of Inspector General — Management and Oversight of Non-Revenue Transactions, September 1, 2026.

https://www.uspsoig.gov/reports/audit-reports/management-and-oversight-non-revenue-transactions

07 · Federal Deposit Insurance Corporation — 2023 National Survey of Unbanked and Underbanked Households, released 2024.

https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-executive-summary

08 · U.S. Code, Office of Law Revision Counsel — 39 U.S.C. §404, USPS powers and nonpostal service limitations.

https://uscode.house.gov/uscode/prelim@title39/section404

09 · Postal Regulatory Commission — Annual Compliance Determination for FY2024, nonpostal services framework.

https://www.prc.gov/sites/default/files/reports/ACD24.pdf

10 · USPS Office of Inspector General — Providing Non-Bank Financial Services for the Underserved, January 27, 2014.

https://www.uspsoig.gov/reports/white-papers/providing-non-bank-financial-services-underserved

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WE ARE ONE.  ·  E PLURIBUS UNUM.