As the United States Post Office continues to be plagued by shipping delays and increased prices, agency officials are looking for ways to boost revenue and ensure financial stability. And that’s why, for the third time since 2008, there is serious talk about providing banking services at the post office.
Only this time, it’s actually happening—at least as part of a small pilot program to offer paycheck cashing. As an alternative to payday lenders that often charge a hefty percentage, customers can pay a reasonable flat fee to redeem their paychecks for Visa gift cards of up to $500.
Right now the service is available at only four of the USPS’s 31,000-plus locations—in Baltimore, Maryland; the Bronx, New York; Falls Church, Virginia; and Washington DC. Eventually, the trial will expand to include bill-paying services and access to ATMs. But even the mere existence of the pilot program is exciting for proponents of postal bank services, which were commonplace in the first half of the last century.
“It’s the first real step toward reviving postal banking since the program was terminated back in the 1960s,” notes Christopher Shaw, a historian and author of Money, Power, and the People: The American Struggle to Make Banking Democratic.
A 2014 report from the USPS Inspector General’s office found that postal banking could generate up to $9 billion in annual revenue. US senator Kirsten Gillibrand of New York, argued earlier this year that offering banking services at USPS retail locations could be the answer to the agency’s financial issues while also alleviating the financial burdens on households beholden to predatory payday lenders. She and senator Bernie …….