Grand Alliance Ally Makes the Case for Postal Banking

A new report is out making the case for postal banking and calling on postal management to make the investments necessary to make quality postal financial services available to the millions of unbanked and underbanked people in the country. The report is called Banking Fair: The promise and urgency of doing postal banking right, and was released in late May by Take On Wall Street, a longtime Grand Alliance member and partner in the Campaign for Postal Banking, and the Save the Post Office Coalition.

The Banking Fair report begins by noting that there are still 10 million adults in the country who have no bank account of any kind. They often fall victim to predatory fringe financial service providers who charge unconscionable fees for simple services that most of us take for granted. The good news, the report argues, is that the Postal Service is well-suited to reach this underserved and vulnerable population, thanks especially to its presence in every community, and the trust that postal workers enjoy from the public.

“We need a public option for banking that is focused on providing a basic service to people who need it as opposed to satisfying wealthy shareholders, and USPS is perfectly positioned to provide that public option” said Annie Norman, Save the Post Office Coalition Campaigner at Take On Wall Street.

The report argues that while the paycheck cashing proof-of-concept tests began in late 2021 were good progress for advocates of postal banking, the pilots were ultimately a missed opportunity. The report argues that this is principally because of postal management’s refusal to offer a service that actually meets the needs of the unbanked and underbanked. The paycheck cashing service was only made available at four locations nationwide. While this was obviously a result of its initial test phase, the report claims it was much too limited in scope to genuinely gauge public interest. The $500 maximum for checks cashed was far too low. Finally, the $5.95 service fee was not competitive with products offered by fringe financial service providers or even retailers like Walmart, where a check of up to $1,000 can be cashed for just a $4 fee. Together, these factors all contributed to preventing the initial roll-out from gaining traction with underserved people.

While the public still trusts the Postal Service, offering a service substantially less robust and more expensive than what’s available in the private sector was not a recipe for success. The report concludes, “For postal banking to be a viable option for the millions of people who are unbanked, the U.S. Post Office must work diligently to create services that address peoples’ primary financial service needs, are at accessible locations, and are also low-cost relative to third-party servicers.”

Despite the shortcomings of this initial test, the Banking Fair report is still confident that expanding and improving financial services at the USPS is a goal worth pursuing. “Postal banking, done right, is key to the Post Office’s future. These new sources of revenue and foot traffic would help secure the USPS’s financial future, and ensure the provision of fair and equitable services for all of us,” the report says.

In addition to advocating for improved and expanded postal financial services, the report highlights some of the recommendations found in A Grand Alliance’s People’s Postal Agenda, published in 2021. These include leveraging the postal network to accelerate the clean energy transition, helping spread broadband to underserved and rural areas, and expanding our democratic rights through universally-available vote-by-mail.

The Banking Fair report can be accessed in full at:

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