Postal Banking Worked—Let’s Bring It Back

This article appearing in The Nation on January 9, 2016 examines how Postal Banking could assist low-income individuals

A Homestead Act for the 21st Century

The goal of the 21st century Homestead Act is to counteract the longstanding legacy of racially discriminatory housing policies by revitalizing distressed communities through public investment. The basic structure of the program is a wholesale transfer of land to residents who meet certain criteria. Accompanied by a holistic plan at the city level to revitalize the community through public investments in infrastructure and jobs, this proposal would benefit people who live in select small and medium-sized cities that are experiencing high vacancies

It\u27s Time For a Public Option in Banking

Associate Professor Mehrsa Baradaran published this article in The Harvard Law Record on November 16, 2015. It discusses how post offices can provide ordinary citizens with banking services

How the Poor Got Cut Out of Banking

The United States currently has two banking systems — one for the rich, one for the poor. It wasn’t always this way. Throughout U.S. history, the government has enlisted certain banking institutions to serve the needs of the poor and offer low cost credit to enable low-income Americans to escape poverty. Credit unions, savings and loans and Morris Banks are three prominent examples of government-supported institutions with a specific focus of helping the poor. Unfortunately, these institutions are no longer fulfilling their missions and high-cost, usurious, and sometimes predatory check-cashers and payday lenders have quickly filled the void. These fringe banks do not provide the poor with useful credit and further bury them in debt. This article tracks the neglected history of government sponsored institutions designed to offer credit to the poor and explains how each abandoned its initial purpose. In doing so, the article highlights the shifts in modern banking that rapidly increased competition among banks and caused homogenization in form. Alternative banking institutions could not survive deregulation and were forced to assimilate and operate like mainstream banks with heightened profits as their sole objective. The poor were the victims. This article proposes to re-establish government-sponsored banks to serve the poor. Options include redesigning existing government measures as well as a novel proposal to use the existing postal service branches to offer low-cost, short-term credit to the poor. Such proposals have strong historic roots and could allow millions of low-income Americans the opportunity to escape poverty

Education Multipliers

This address was given to prelaw students at Brigham Young University on March 12, 2012

Banks: A Broken Social Contract

This article explores how how the Financial Crisis of 2008 affected the banking industry and brought three specific problems: The first was that the banks and non‐bank financial institutions created due to deregulation were huge, interconnected, and highly leveraged; Second, the panic started in the “shadow banking” sector and showed that the short‐term credit transactions and derivatives that non‐bank financial institutions traded and used for funding for years were similar to banking, and thus prone to runs; and Third, the entire premise of deregulation rested on an assumption that individual firms and market players could accurately calculate and manage risks, or “self‐regulate.” This article discusses whether Dodd-Frank has corrected these problems

Why the Poor Face a Higher Cost of Banking

Professor Baradaran appeared on PBS Newshour to discuss inequality in the banking system on January 6, 2016

Postal Banking: A Lifesaver for America\u27s Poor

If banks are not providing credit to the poor, the state should provide it directly.The existing post office framework represents the most promising path toward effectuating such a public option. American banks long ago deserted their most impoverished communities, but post offices, even two centuries later, have remained — still rooted in an egalitarian mission. There have never been barriers to entry at post offices, and their services have been available to all, regardless of income

The Post Office Banks on the Poor

Approximately 88 million people in the United States, or 28 percent of the population, have no bank account at all, or do have a bank account, but primarily rely on check-cashing storefronts, payday lenders, title lenders, or even pawnshops to meet their financial needs. And these lenders charge much more for their services than traditional banks. The average annual income for an “unbanked” family is $25,500, and about 10 percent of that income, or$2,412, goes to fees and interest for gaining access to credit or other financial services. But a possible solution has appeared, in the unlikely guise of the United States Postal Service