Like a bad penny, the idea of the Post Office offering banking services is being resurrected.
Between 1910 and 1967, the U.S. Post Office offered banking services. However by the 1950s, the need for the Postal Savings System was being questioned and in 1965 the Postmaster General recommended abolishing the system.
But on July 16th of this year, the Pew Charitable Trust hosted an event on whether the Post Office should offer financial services.
Senator Elizabeth Warren spoke at the event and has become a vocal champion of postal banking. For example in U.S. News, Senator Warren argued that allowing the post office to offer affordable banking services would be a win for underserved families and it would also shore up the finances of the Post Office. She pointed out that the Post Office already provides some financial services, like international money transfers to certain countries and domestic money orders. (Click here to read the op ed)
On July 24th, Rep. Cedric Richmond (D-La.) introduced a bill, The Providing Opportunities for Savings, Transactions and Lending Act – or the POSTAL Act, that would allow the U.S. Postal Service to provide an expanded range of financial products -- including checking accounts, interest-bearing savings accounts, small-dollar loans, debit cards and international money transfers. In addition to these products, which are explicitly mentioned in the bill, Richmond would allow USPS to offer “such other basic financial services as the Postal Service determines appropriate in the public interest.”
The danger to banks and credit unions is that this new postal savings bank could be perceived by many as a government-endorsed and preferred provider of financial products and the last thing we need is more government competition with the private sector.
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I don't understand why a liberal like Sen. Warren is so hostile toward credit unions which did not cause the most recent financial crisis. I'm glad Dr. Leggett appears to understand that while he is clearly against credit union tax exemption, having the post office providing financial services would be 1,000 times more expensive to the American taxpayers who would receive 0.001% of the customer service that even banks give.
ReplyDeleteLooking at how well the Post Office delivers mail on time it concerns me they are going to deliver banking services on time. So they will sell you stamps and offer you a home loan, car loan and a debit card, too. And these postage stamp clerks have business banking experience to provide this service competently? If they had this expertise why are they selling stamps at the Post Office?
ReplyDeleteThey make more money as a Post Office employee?
DeleteUSPS and WalMart via the Bluebird card are/will be serving the underserved.
ReplyDeleteFormerly the exclusive venue of credit unions.
For the credit unions that don't focus on small loans to people of small means, not a concern.