If ever there was consensus around two fundamental financial problems in America, most people will agree that there is glaring lack of reasonably-priced financial services for low income consumers and that the perennial financial challenges of U.S. Postal Service needs to be addressed once and for all. Tension starts building only when solutions are offered that invariably cross someone’s ideology line.
While a comprehensive solution to neither problem has been forthcoming, a recent idea has been floated through several articles that sounds intriguing: expand the post office’s product offering of basic financial services to consumers.
Today the post office offers money orders, a poor man’s cashier check, which is universally recognized and accepted as a cash equivalent. Until 1967, the USPS even offered postal savings accounts. Expanding services to include money transfer services, prepaid debit cards, check cashing and even small loans would provide a more modestly priced alternative for consumers from predatory payday loans, check-cashing services and high-fee money transfer services.
With 35,000 branch offices and well-oiled infrastructure, the Postal Service is easily positioned to enlarge its services for a benefit some have estimated might generate billions of dollars of sorely-needed revenues for them.
Low-income consumers would surely benefit by lowering their cost of financial services, from the average cost assessed by non-bank sources estimated at $2,412 per household. Presently more than 68 million Americans are considered ‘unbankable,’ leaving them vulnerable to financial service providers who charge exorbitant fees for basic services.
It’s an idea worth considering, and who knows, may lead to longer hours and shorter lines at neighborhood post offices.