OPINION: Why turning the Postal Service into a bank isn’t nearly as ridiculous as it sounds
Wednesday, May 27, 2015
What got many people so excited last year about the concept of postal banking – enabling the U.S. Postal Service to provide expanded financial services for the 68 million Americans with little or no access to them — was a government white paper from the post office’s Inspector General, outlining the benefits and advantages of such a program. In a nutshell, USPS IG David Williams explained how postal banking could promote financial inclusion and save families billions while turning a small profit for the Postal Service besides, a complete win-win idea.
Now, Williams’ office has delivered a follow-up report, “The Road Ahead for Postal Financial Services,” which goes into more detail about what a modern postal banking system might look like. Unfortunately, much has changed on Capitol Hill since last January, and none of it good. If a Democratic Senate majority couldn’t get pro-postal banking members onto the Postal Service Board of Governors, there’s little hope that the current Republican majority will. However, this remains a tremendous idea to relieve economic inequality and preserve an important public-sector ladder into the middle class; and continued agitation just might get it done.
The report makes the point that USPS is already a large alternative financial services provider. Post offices sold $21 billion in money orders last year, earning $66 million in profit. Through a partnership with American Express, USPS sells prepaid cards. They can legally host ATMs on site. They offer international money transfers and remittances, and even, on a limited basis, check cashing services. The Inspector General suggests that the agency simply scale up to reach beyond the approximately 13 million customers they currently have.