As Mehrsa observes, the largest problem for middle and working-class access to the benefits of banking concerns the perceived cost of catering to such small time financiers. They simply do not borrow or lend enough to make it worthwhile. One question addressed in the second half of her book concerns some alternatives to banks that might be willing to enter a market that the big national banks have largely exited, in her telling.

But of course, fixes that can market efficiently to low dollar depositors might well have some competitive advantages when it comes to high dollar depositors as well. To me, the interesting question is whether the innovation here will be one of financial technology or one that requires a regulatory blessing. Mehrsa considers microfinance, which Christine has discussed (and so I won't), or community minded banking, which looks like a triumph of hope over experience. But she also surveys debit cards, Walmart, mobile banking, and peer-to-peer lending; they all offer the prospect of inexpensive credit, or at least efficient access to the financial system, without necessarily requiring the use of algorithms or robots.

Leaving aside mobile banking and the Wealthfronts and VenMos of the world, it is worth noting that the problems for debit card issuance, by the post office or whoever, banking at Walmart, and P2P are regulatory ones, rather than technological ones.  The question has been whether these institutions are enough like banks to be trusted with deposits.  Much of the answer to that question is tied up in bad old competition avoidance by the already extant banks, who lobby against potential competitors.  But some of it lies in the idea that few can be trusted to hold other people's money.  Bank charters, as Omarova and Hockett can tell you, require the institution to act in the public interest.  Other holders of funds have fiduciary obligations to the owners.  And the regulatory question is whether Walmart or Joey8359 on the internet will feel the same way, or, put another way, whether we should care that they obviously will not.

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