A number of U.S. postal service offices in four cities are offering banking services – including check cashing – as part of a testing program that could help reduce the dependence of millions of Americans on the drug. payday loan and check cashing stores while reinforcing the besieged. agency finances.
It is one of the most significant efforts to date to reestablish a postal banking system, which was largely abolished in the 1960s, following calls from progressive lawmakers and advocates to democratize the banking access for millions of so-called âunbankedâ or âunderpaidâ people. banked Americans.
The pilot program, in conjunction with the American Postal Workers Union, quietly began offering check-cashing and bill payment services, access to ATMs, and expanded e-transfer and money order offers on the month. last in New York, Washington DC, Baltimore and Falls Church. , Virginia. A broader postal banking program would require a law of Congress, although progressive lawmakers, including Alexandria Ocasio-Cortez, have supported measures to revive postal banking services.
Paychecks up to $ 500 can be redeemed for Visa cards for a flat fee of $ 5.95 – putting the USPS in direct competition with check cashing companies who often charge higher fees for similar services.
The Postal Bank was backed by Senator Bernie Sanders during his 2016 and 2020 presidential campaigns, and the idea was incorporated into his and Joe Biden’s agenda during Mr. Biden’s 2020 run.
About 60 million Americans who live in areas with access to the USPS office do not have a community bank branch, according to a May 2021 study from the University of Michigan. Banking services at local post offices could benefit Americans living in urban and rural areas, especially people of color in rural areas, according to the report.
Nearly one in five American adults is unbanked, according to the Federal Deposit Insurance Corp, or FDIC, which estimates that 8.4 million American households do not have a bank account. An additional 24.2 million households are âunderbankedâ or have checking and / or savings accounts, but also depend on payday loans and similar services.
Last year, as the federal government issued direct payments to support Americans during the pandemic, the union said reviving postal banking services is “a way to ensure that everyone in the country has access to services. essential financial resources, and at times like these when the government is keen to get money into the hands of consumers quickly, it would be able to reach them quickly and efficiently, without exacerbating existing problems of income inequality. and other inequalities in our current financial system.
The University of Michigan study indicated that the USPS “is probably well positioned to provide basic personal financial services to the 20 million people who received stimulus checks in the mail and the 33 million people who banks systematically exclude each year by charging high costs and fees. “
The program also follows growing contempt by union members and Democratic lawmakers for Postmaster General Louis DeJoy, who has been appointed by Donald Trump and oversees the implementation of cost cuts in mail deliveries that will slow down a third of all letter and parcel deliveries in 27 states. , according to an analysis of The Washington Post.
âPeople deserve the fast, reliable and efficient postal service promised by law,â union president Mark Dimondstein said in a statement last week. âWe believe management’s response to months of poor performance should be to improve service and regain public trust, instead of focusing on shifting goals and slowing service standards.â
US Representative Bill Pascrell, among the most prominent critics of Mr. DeJoy’s administration, said on Twitter that “the future of the USPS depends on the implementation” of postal banking.
âThe postal bank will unite rural and urban communities and crush predatory payday lenders,â he said.