The Racial Wealth Gap and Banking (+ the USPS) | LET’S CONNECT - YouTube

Not having money in this country, it's like  trying to swim in shark-infested waters with  

weights on your ankles. It's hard to fix, it's  costly, and for generations of Black people,  

it's been compounded by decades of racist  government policy. Let's take banking.  

If you have enough money, your bank might dole  out travel points, offered lower fees for service,  

or give you free checking. If you don't have  enough money, your bank can charge penalties for  

keeping too little in your account, or fine you  for small infractions, like temporary overdrafts.  

That's if you even have a bank. Thousands  of branches across the country are closing  

in low-income areas, leaving people to rely  on costly alternatives, like payday lenders  

and check-cashing services. And this isn't  like in Jaws when the shark eyes the lone  

swimmer. 64 million Americans don't have access  to basic financial services. That's one in four  

Americans trying to keep their heads above water.  So the rich get richer, and the poor get poorer,  

and neither snow nor rain nor heat nor gloom  of night stays these couriers -- wait, what?  

What does the USPS have to do with this? Well  let's connect banking to your local post office.

The post office may actually be one  solution for the millions of unbanked  

or underbanked Americans in this country, and  by extension, help close the racial wealth gap.  

But first, a look back at how we got to this  wealth gap. Rewind the tape, please, to slavery.  

Beyond the violence and humiliation of slavery,  there's the fact that for 246 years Black people  

couldn't own anything. When President Lincoln  signed the Emancipation Proclamation in 1863,  

Black people owned only 0.5%  of the total wealth in America.  

Then after the Civil War, powerful white  southerners wanted to keep their cotton mill  

spinning with cheap labor so they said, "no way,"  to granting freed slaves 40 acres and a mule,  

as promised by General Sherman and President  Lincoln. Instead, they'd allow Black people  

to have a government-backed bank account, which  might have been helpful, except the bank collapsed  

because of congressional mismanagement in 1874,  and the depositors lost nearly 3 million dollars.  

Then came the Black codes enacted by southern  landowners to prevent Black people from voting,  

trading, or testifying in court. And in 1896, we  have Plessy v. Ferguson, where the Supreme Court  

blessed "separate but equal," which just opened  the floodgates of segregationist Jim Crow laws  

and kept Black people from accessing hotels,  homes, hospitals, theaters, jobs and so much more.  

Even in the rare cases where Black people  were able to amass wealth or power,  

it was violently stripped away, either with  a complicit or apathetic government response,  

as we saw in the 1898 Wilmington massacre,  and again in the 1921 Tulsa massacre.  

And it's not just what the government actively did  to hold Black people back. It's what they didn't  

do, too. President Franklin Roosevelt needed the  Senate's southern Democrats to pass the New Deal,  

which was one of the most progressive social  welfare programs in history. To do that, though,  

he left Black people out of the package.  Workers' protections were geared to jobs  

that white people held, and government-backed  mortgage markets floated white people into the  

suburbs and left Black people in the ghettos.  Even President Johnson's 1960s war on poverty  

and Great Society programs were like offering  Advil for a tumor. They advocated charity and  

education over a chance at prosperity and power  for Black people. There were job training programs  

but no real job opportunities. By the time Richard  Nixon took office, with his war on crime vision,  

the specter of the government facilitating  upward mobility became politically toxic. The new  

rallying cry of conservatives in power was "law  and order," yet another axe swing on the wealth  

and freedom of Black people. Law enforcement would  be the first line of defense in this new war,  

surveilling and controlling mostly lower-income  Black and Brown communities. Black people were  

told to invest in their own communities, in their  own Black banks, and Black-owned businesses.  

But what this amounted to was a segregated and  unequal system without mainstream infrastructure  

and support. Today, a third of Black families  report having no wealth or assets at all, and the  

Black community owns less than 2 percent of wealth  in the US, up just 1.5 percent since slavery.

And again, banks have closed branches  all over the country in low-income areas,  

creating these banking deserts. And without  banks, the sharks move in. The sharks from the  

earlier metaphor, but now I guess they're desert  sharks. Anyway, you can't save your money when you  

don't have a place to save it, and you can't pay  your bills without a way to cash your paycheck,  

so you're left with costly alternatives that  charge absurd interest and penalties. Over the  

course of a 30-year working career, these services  can cost more than $86,000, in fees which is twice  

the annual income for the average Black family.  Now, if only there was an institution represented  

in every zip code that could already,  by law, offer basic financial services.  

And that's our connection to the post office.  Under current law, a post office could immediately  

offer electronic money transfers, check  cashing, bill payment, prepaid cards, and ATMs.  

In fact, they've already provided these services  in the past. From 1911 to 1967, the US had postal  

banking. The postal service offered savings  accounts, and by 1934, the postal bank had 1.2  

billion dollars in assets or about 10% of  the entire banking system. But in the 1960s,  

a drop in deposits collapsed the program.  And the post office has one other advantage:  

trust. People trust their local post office.  It's familiar. It's personal. And trust is big  

when history has already seated mistrust  in government-backed financial services,  

like the first Black bank. Now, if anyone says,  "we can't give the post office more to do,  

when they can barely deliver  mail and are running a deficit,"  

here's the reply: the postal service just helped  deliver a safe and secure election by delivering  

millions of mail-in ballots in the middle of a  pandemic. On top of their regular duties. And  

the post office was actually completely  self-funded until a 2006 law required it  

to pre-fund its retirement liabilities for 75  years into the future. In fact, postal banking  

would actually help the post office out of its  current deficit. The postal service estimates  

that offering banking services could actually add  eight to ten billion dollars in revenue a year.  

And there we have our connection, the post office  and banking. The post office alone can't keep  

people out of the shark-infested waters of  poverty, but it's one thing the government  

can do right now without Congress, without any  new laws. It's a lifesaver, and that's a start.  

On the next episode of Let's Connect, we're  going to share actions you can take right now  

to help make postal banking a reality. Be sure  to connect with us by subscribing to our channel,  

and we'll fight for economic justice together.