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Wal-Mart’s New Scheme to Prey on America’s Poor


The FDIC estimates there are 10 million people living in the U.S. who do not have a bank account — that’s one out of every 13 households. Nearly 33 percent of people living in Starr County, TX can’t write a check. In one census district in Savannah, GA, over 42 percent of residents are unbanked. The unbanked are usually poor, often minorities, and find themselves shunned by banks that can’t make money off them. Typically, they end up turning to predatory check cashers and payday lenders. Many also feel a great sense of social division between themselves and those who have bank accounts.

The crash of 2008 exacerbated America’s growing problem of the unbanked, as many people faced financial ruin and the U.S. saw an increase in distrust of the banking industry. Some people have turned to credit unions, but these institutions generally do not actively recruit lower-income clients, many of whom may be unfamiliar with their services. [...]

Is it better than what the big banks offer? Yes, but let’s not think for a moment that Walmart has interest in anything but the bottom line. Walmart is the company that famously mooches off the U.S. taxpayer by dumping upon us the costs of healthcare and other social services its poorly paid employees can’t afford. It’s the company that regularly violates the rights of its workers by locking them in stores overnight, stealing their wages, engaging in sex discrimination, and denying meal breaks. It’s the company that took corruption to spectacular heights when it decided to bribe its way into Mexican markets.

As Demos senior fellow Wallace Turbeville has observed, there’s a big difference between Walmart and the U.S. post office: Walmart has incentives to squeeze disadvantaged customers who have little bargaining power. The post office has a huge geographical advantage over Walmart: there are 31,000 USPS locations and offices compared to Walmart’s 4,807 in the U.S., and for people living in rural areas, the post office is particularly convenient. Many other countries have post office banking, including Japan, Switzerland and the UK, and in fact, the USPS offered savings accounts until 1967 (deposits peaked at nearly $3.4 billion in 1947).