Your Newest Lender: The Post Office?
Apart from the postal workers who deliver your checks—and really, who’s writing paper checks anymore?—”money” and “the post office” don’t exactly go together.
But that might be about to change.
The United States Postal Service has announced, via a report by the Office of Inspector General, that it’s considering providing basic banking services to help reach some 68 million underbanked Americans (that’s more than a quarter of U.S. households).
The post office is looking into partnering with banks to provide basic financial services such as bill paying, check cashing, direct deposits and small dollar loans. With a nationwide infrastructure already in place, the U.S.P.S. is well-placed to expand banking services into neighborhoods that may not have easy access to banks.
Because they don’t have access to banks, many Americans shell out money for the fees and interest that come along with services like payday loans and check cashing—to the tune of nearly $2,500 a year. In The Huffington Post, Senator Elizabeth Warren (who has placed her support behind the initiative) points out that this is 10% of the average underbanked family’s income—the same amount that family might spend on food.
“On average,” the U.S.P.S. report notes, “people who filed for bankruptcy in 2012 were just $26 per month short of meeting their expenses … a suite of financial services from the Postal Office could be a powerful new tool to help the underserved become more financially secure.”