on Jan 29th, 2014 in Ideas Worth Exploring | 10 comments
 

Could the U.S. Postal Service help the nearly 70 million Americans who are cut off in some way from the mainstream financial system? We’re talking about people who, because they lack ready or full access to normal banking services, paid $89 billion in fees and interest to alternative financial service outlets such as payday lenders and check cashers in 2012 alone. They are the financially underserved – also known as the underbanked or unbanked – and many of them are one unexpected expense away from bankruptcy or homelessness.

According to our recently released white paper, Providing Non-Bank Financial Services for the Underserved, not only can the Postal Service help the financially underserved, but it is also well-suited to the task. For starters, the Postal Service network extends to every community across the country. And while the Postal Service already offers money orders and international money transfers, the paper identifies a suite of additional services and products the Postal Service could develop, mainly through partnerships with banks:

  • Payment services
  • Reloadable prepaid cards
  • Options for mobile transactions
  • Access to small loans

By offering these kinds of services, the Postal Service could help bring financial stability to millions of Americans. It could also generate income: Even if only 10 percent of the money paid in interest and fees were instead spent on less-expensive Postal Service alternatives, the Postal Service would realize $8.9 billion in new revenue.

Moreover, when you consider that 59 percent of post offices are located in ZIP Codes that have only one bank or none at all, and that surveys repeatedly demonstrate the public’s unmatched trust in the Postal Service, developing non-bank financial services would not only meet a market need, but also fulfill a public purpose.

What do you think? What types of non-bank financial services could the Postal Service provide to help address the needs of the underserved? 

10 Comments

Change all city routes to evaluated route like the rural carriers.

Reward would be a big reduction in cost and much earlier delivery.

When I was a city carrier I was on the OD list but always took pride to never work overtime on my route. The more mail the harder I worked.. I always told my supervisor that I could help on another route even in under time. Wow how it has changed. Our mail comes anytime between 10:00 AM and 6:30 PM. Just this past month someone took one of my checks and cashed it.
I am not going to pay any bills by computer . The Postal Service was GREAT to me . I will use the Postal Service if you go to $1.00 per stamp. Thanks again for my wonderful retirement. I retired a level EAS 25 and am so blessed. I still have two children working for the Postal Service . They are Rural Carriers and love their jobs. Hard for me to believe some of the things they come home with. There will always be a Postal Service. Lets work on these free loaders who are on WC and Disability Retirement and work every day?

WOW. Things sure have changed. I have been waiting for 2 paychecks since my casual employment ended beginning of January. No presents for my kids at Christmas. The post office is a horrible place to work among messing up our pay, there are so many abusive supervisors...and they get away with it.

This is a long-recognized need of a substantial portion of our fellow citizens. As a society, we should have recognized and met this problem years ago. Those who are less fortunate are basically prey for the payday loan and money-transfer companies. We can rescue them for what will be a profit to the USPS, and probably save funding from other programs that these people find themselves driven to. Now, what spurious concerns will the financial services industry come up with?

With all the credit card fraud going on (e.g. Target Credit Card Breach) you should consider offering a card such as that proposed in this PayPal patent which anonymizes a cardholder's account number...
http://letstalkbitcoin.com/316/#.Uu2wsPldWKw
and sure add a Bitcoin option to fill the card... why not?

I'm sorry, but is this not the responsibility of HHS? About a year ago, I posted on another blog subject regarding Non Bank Financial Services to "under-served", whoever they are. Perhaps a review of your existing performance is in order.
I am not suggesting you initiate another study, or re-evaluate the previous countless studies or Executive initiatives.

http://www.performance.gov/

Bitcoin exchanges would be a windfall and kill two birds with one stone. The post office already handles a great deal of money, is highly digitized, has optimal locations in every major city and suburb in the country and the international connections to match. This would almost instantly increase the value of the coin, thus stabilizing the underlying currency with higher liquidity and increased acceptance, leading in turn to higher transaction volumes, and the Post Office would get a cut of every transaction.

The postal employees would think bitcoin would be stealing their jobs or union busting. I truly think they believe that the world believes they're irreplaceable.

Let's also let the Postal Service invest in derivatives and other complex financial instruments -- what the heck, they are playing with monopoly money. Ask Orange County, CA, how investing in complex derivatives worked out for them in the mid 1990s. I also remember the Postal Service lobbying to be allowed to invest in the stock market rather than be limited to Treasury bills in the booming market years of the late 1990s. Postal officials thought they'd see their investments grow significantly and this would be the financial salve they needed. A short time later, the tech bubble burst and many companies and individuals saw their portfolios crumble. I remember thinking that Congress had finally gotten something right by rejecting the Postal Service's request for greater investment freedom. This captive customer doesn't want stamp prices to go up to pay for bad postal investments. If Congress were to lift the Postal Service's monopolies, it might be a different story.

Bitcoin service would be assume, a step to the future!

As a boy I had money in a postal saving account. I agree that the post office should engage in consumer banking, subject always to conduct any financial business on a strict basis that will insure reasonable profits. I am offended by the fees charged by payday loan companies, credit card companies, and others who prey on unsophisticated citizens - who, it seems, make up a large percentage of the US population. Having said that, my concern is that if the USPS gets into the financial business it not become a publicly funded service that loses money and then has to rely on taxpayer support.

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