- 23 November 2015
- Transport / Logistics Services
The USPS is one of the only national postal operators in the world not to provide a banking service to the country’s citizens. The American Postal Workers Union has leant its support to a campaign to change this, so the USPS can provide low cost banking to the 28% of US households underserved by the mainstream banking system.
The argument of the Campaign for Postal Banking is that the USPS could turn around its business by offering low cost banking to customers, such as cheque cashing, low value loans and bank accounts. In operating a banking system from its 30,000 branches nationwide it would both generate essential revenues to help deal with the large scale losses brought on by declining mail volumes, and add value to the USPS offices that serve the communities.
The UK’s Post Office network runs National Savings (effectively government bonds for consumers) and the Post Office Bank, which serve millions of customers between them. This is one of 139 countries’ national postal operators that offer such services to their citizens.
In providing an accessible, competitive and less credit history aware service, so millions of US customers hit by bad credit and would ordinarily go to sub prime finance for help, so more people would be able to get away from bad credit and bullying creditors. In a statement the APWU said the USPS would then support the, “28% of U.S. households [who] are underserved by traditional banks and turn instead to payday lenders, check cashers and other financial predators”.
The losses made by the USPS are routinely huge, in part due to the size and reach it must be just to serve customers across the vast distances between Alaska in the north and Puerto Rico in the south, Hawaii in the west and Maine in the east. Its employee benefits for current and retired staff make it a major loss making enterprise, yet it is widely felt that small scale banking without extending to mortgages and other high risk financial instruments would better serve the nation, but also claw back some of the financial losses it routinely makes.