How Do Green, Postal and Public Banks Intersect?

What is the difference between Green Banking, Postal Banking, and Public Banking? We’ve outlined a few key differentials below.

All three types of banking are public alternatives to the Wall St. style, for-profit, large commercial banks which we are used to providing both retail (taking deposits from individuals and providing personal banking services) as well as commercial services (lending to and working with institutions, governments, and businesses). However, each type of bank is designed for a unique purpose: green banking is meant to drive private capital into “green” market gaps; postal banking is well suited to fill the specific need of reaching people with little or no access to retail banking; public banking is meant to create a cyclical cash flow by leveraging a community’s money specifically to serve the needs of that community.

Each offers unique benefits and styles that set it apart. Green banking corners a niche market: its specialized financial know-how opens doors to allow capital to move directly towards developing green technology markets, meeting ambitious emissions targets, and lowering energy costs. Postal banking leverages the fact that USPS, with locations already built-in banking deserts, is legally required to serve all Americans, regardless of geography, at uniform price and quality, eliminating many barriers for those who are underserved by the current system. A public bank, automatically funded by existing (not new) government revenue, is able to stabilize local economies by increasing the availability of productive capital in a community, eliminating losses due to high-interest loans, and offsetting recessions by providing lending when it’s most needed, usually through collaboration with community banks.

More info outlined in the lists below:

POSTAL

Designed to reach people with little or no access to retail banking
Primarily retail, providing ATMs, money transfers, check cashing, bill pay, and in more comprehensive proposals, savings accounts, and small loans
Start-up funding is not an issue, as adding banking services would actually make the post office money
Inherently a public non-profit entity
Perks: USPS is legally required to serve all Americans, regardless of geography, at uniform price and quality. Locations already exist in many banking deserts
Goals include: expanding access to affordable financial services

Sources: Campaign for Postal Banking, Take on Wall St., Forbes.com

PUBLIC

Designed to make and leverage money to serve the needs of the people of the community it serves and to make low-cost loans to finance civic needs.
Usually commercial (lending to businesses and governments)
Principally funded by a government body (national, state, county, or city government) through deposits of revenue, taxes, fees, etc.
Fully public entity
Perks: low overhead, conservative lending (no speculative lending), new income to a community without raising taxes, offset recessions by lending more, not less
Goals include: increasing the availability of productive, equitable capital in a community: increasing lending to local projects (e.g. social housing, community enterprises, green projects), empowering small businesses and historically underserved communities.

Sources: RMPBI, Public Banking Coalition, Democracy Policy

GREEN

Designed to drive private capital into market gaps
Usually commercial, does not take deposits
Funded by governments or charitable contributions or both
Public, quasi-public or non-profit entity
Perks: specialized market and financing know-how leads to bridged market gaps that allow capital to flow at scale
Goals include meeting ambitious emissions targets, mobilizing private capital, lowering the cost of capital, lowering energy costs, developing green technology markets, supporting local community development, and creating jobs

Sources: Green Bank Network, CO Green Energy Fund