USPS White Paper: Offer Banking Services



The next time one of your customers steps into a Post Office, she might ask for a roll of stamps, a couple of pre-paid envelopes and a $200 loan.

Sounds far-fetched that the United States Postal Service could venture into the banking business? Maybe not as far-fetched as you think.

It’s no secret that a financially-strapped USPS is looking at ways to generate revenue and it seems that all options are on the table.

The Office of the Inspector General of the USPS recently released a White Paper on “Providing Non-Bank Financial Services for the Underserved.”

“The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector,” the report says.

“It could accomplish this largely by partnering with banks, who also could lend expertise as the Postal Service structures new offerings.”

Complementary Role

The report is quick to point out that it is not looking to compete with banking institutions but rather work as a complement to them.

“The Postal Service could help financial institutions fill the gaps in their efforts to reach the underserved,” the report says. “While banks are closing branches all over the country, mostly in low-income areas like rural communities and inner cities, the physical postal network is ubiquitous.

“The Postal Service also is among the most trusted companies in America, and trust is a critical element for implementing financial services,” it continues.

“With affordable financial offerings from the Postal Service, the underserved could collectively save billions of dollars in exorbitant fees and interest. This could make a big difference to struggling families — on average, people who filed for bankruptcy in 2012 were just $26 per month short of meeting their expenses.”

The report states that many postal services in other countries have had success in financial services. It also notes that the USPS already dabbles with some financial products such as money orders and international money transfers.

“(Some services offered) could include reloadable prepaid cards with features that encourage people to save money, mobile transactions, and products that help the underserved take part in e-commerce,” it says.

“They also could include new ways of transferring money both domestically and internationally, and perhaps even include small loans that would help customers overcome unexpected expenses. As society becomes increasingly cashless, the Postal Service’s ability to provide a physical link to the new digital economy will become more and more vital.”

Support from Warren

While bankers are balking at the idea, Sen. Elizabeth Warren was intrigued by the idea. Warren is an advocate for the Consumer Financial Protection Bureau and was considered a candidate for the agency’s chairmanship.

Why Buy the Cow When You Can Get the Milk for Free?



When I was in college, the country was going through a social and sexual revolution. For the first time, unmarried couples started openly living together.

When a grandmother learned that her grandchildwas “living in sin,” she routinely clucked (you know, that noise of disapproval created by repeatedly sucking your tongue downward off of your palate) and asked disapprovingly, “Why buy the cow when you can get the milk for free?”

Historians have traced that expression back to the mid-1600s, when farming and livestock were the most common pursuits.

The original expression is believed to have been, “It is better to buy a quart of milk by the penny then keep a cow.”

In Australia, they say it in an oddly civilized way: “Why buy a book when you can join a library?”

The fact is, that rhetorical question can be applied to virtually every circumstance where someone is trying to get something for nothing. But I’m not writing about trying to get a free hamburger from McDonalds.
I am writing about association membership — in particular, the conundrum that non-members get to enjoy the fruits of the association’s work, without paying dues.

National Associations

Membership at the national level is mandatory. According to the, mandatory means “required by law or rules; compulsory.” According to me, it means you have to join.
When it comes to national associations, FiSCA and CFSA attract the lion’s share of the financial services industry. Here’s how they each describe themselves:
Financial Service Centers of America, established in 1987, is the oldest national trade association representing more than half of the nation’s financial service centers providers, with member locations in communities across the country.

Financial service centers offer a wide array of basic financial services to millions of Americans including check cashing, money transfers, money orders, bill payments and small dollar, short-term loans.
Visit for more information.

The Community Financial Services Association of America was established in 1999 as the national organization for small dollar, short-term lending or payday advances.

CFSA member companies represent more than half of all payday advance stores and are located in neighborhoods across the country [32 states] providing a valued service to those communities.

Visit for more information.

What They Do

Both organizations meet frequently with regulators, conduct annual events that are attended by members, vendors, and regulators, commission surveys and studies, foster best practices, keep their members updated on news and events, respond to unfounded attacks on the industry and generally communicate the need and value of the services you provide.

Through my companies, I have been a FiSCA member and attending its conferences since the organization was founded.

Over that time FiSCA has grown to become a broad representative presence for the entire financial services industry, recently moving its headquarters to Washington.

CFSA has grown rapidly and is focused on short-term credit, featuring many corporate members, and is headquartered in Virginia.

If you can somehow come up with an excuse for not joining a national association, at the very least, attend a national association event.

They are reasonably priced, located in great venues, and you’ll get the chance to see and meet with the vendors who serve the industry, be exposed to the latest products, get updated on regulatory and legislative directions, attend workshops, and develop relationships with other industry members.

State Associations

When it comes to your state association, most folks fall in to one of three groups: MIWD (Member In Words and Deeds); MINO (Member In Name Only) or NAM (Not A Member).

MIWDs attend every meeting and event, join committees, support association efforts, serve as officers and board members, promote the industry and more.

They are the farmers: they take care of the farm and cows, and do what it takes to produce the milk.

MINOs make up the vast majority of every organization. They pay their dues (which pay the bills), and generally support association efforts.

These are the financiers of the farm — they may not work there, but they put their money where their mouth is. And that’s very important.

NAMs have their reasons for not joining. But at the end of the day, they need to put those aside (whether politics, philosophical disagreements, an argument at a meeting in 1988, or something else). State associations need their help and participation.

All Shapes, Sizes

There are more than 30 state associations listed on the FiSCA website and in Cheklist magazine.

Granted, some are larger, better established and more organized than others. In most cases that’s a function of math: (number of members) x (dues) = money to do things.

Regardless of size or depth, in each and every instance, they represent your only opportunity for formal representation within your state.

I believe in supporting your state association, so you need to join yours, even if you are a member of a national association.

State and national associations have common but very different roles in your future, especially in regulated states.

National organizations cannot monitor legislation and industry-impacting activity in each and every state — they often depend on state associations to identify pending storm fronts.

Similarly, national organizations cannot meet and work with regulators and legislators in every state in order to improve communication and relationships, protect licensees and achieve positive change. Both levels are necessary.

If you don’t bite the bullet and join, it becomes a “chicken and egg” problem. The organization needs members, some people won’t join unless they see activity (meetings, events, legislative progress), and activity cannot be funded without members.

In many cases, only a handful of folks fund and run the entire state association — at their own cost in time and money and to the benefit of all licensees in that state.

In many states, the association’s efforts have produced an ongoing and open dialog with regulators and legislators, rate adjustments that help absorb increasing costs and risks, amendments to regulations that assist both consumers and licensees and revenue growth opportunities (see below).

Grade A, Ultra-Pasteurized and Homogenized

Like milk, some associations are deserving of Grade A ratings for their ongoing efforts. Many thanks to Ed D’Alessio (FSCNY), Scott McClain (NJFSC), Abby Hans (CCEA), Bill Staderman (RIAFSC), Amy Cantu (CFSA) and the FiSCA team for their insights into the activities and accomplishments of their respective organizations during 2013. Here’s a “Golden Globe” style take on what these organizations have collectively achieved in the past year, for which they are all “winners.” Most important accomplishment: Opening and maintaining ongoing communication with regulators and legislators. Most important ongoing service: Monitoring legislation and regulation at the earliest levels of consideration – and responding on the industry’s behalf. Most offered services: AML/policymanual training and member guidance. Best industry-sustaining activity: Working with regulators to have permitted rates track CPI, minimum wage, risk and other cost increases. Best immediate service: Sending alerts to members of crisis level issues. Most time-saving effort: Working to eliminate filing CTRs and SARs with state agencies (since they are already filed and accessible on-line at FinCEN). Most consumer-oriented achievements: Supporting consumer protection, choice and awareness through (1) effective rate and terms disclosure and financial literacy, (2) opposing legislation that would limit consumer choice, (3) working to stop unlicensed/unregulated activities and (4) endorsing “Best Practices.” Most effective community support: Scholarship and disaster relief programs. Best process accomplishments: Working with regulators to improve on-line applications, and to conduct audits at main offices, rather than store-by-store. Promoting esprit de corps: Running effective, informative and well-attended meetings.

You Can Do Something

Obviously, join one or both national associations. If you have a state association, and you are not a member, join now.

Put aside your reasons for not joining, whatever they may be, for the common good of the industry in your state.

Without a state association you have absolutely no local voice — especially with regulators and legislators — and no place to exchange ideas, directions, and opportunities. Put “Join my state association” on your calendar today.

As they say in Australia, “Don’t just sit there like a stunned mullet,” join up and participate. You and the entire industry will be better for it.

Richard Kelsky is president of TellerMetrix, Inc. a provider of POS transaction, compliance, interface, electronic deposit and marketing software to check cashers, payday lenders and retail banks. He is also a New York and Connecticut Bar member, a Polytechnic Institute of NYU and NY Law School grad, a Certified Anti-Money Laundering Specialist and a frequent lecturer on business, legal, compliance and technology issues. He can be reached at: This article does not constitute legal advice and is an expression of opinion by the author and not of any entity or organization.

Check Casher Seeks Return of Seized Funds



It’s bad enough to be stung for nearly $22,000 in bad checks, but it is even worse to see the money paid out taken by the government under its asset forfeiture powers. A New Jersey check casher found out how hard and costly it can be to successfully navigate a claim made against forfeited assets.

On Feb. 9, 2010, a man whose first name was Amaury presented three checks that collectively totaled $21,965.00 to a check cashing service located in New Jersey. The check casher paid Amaury the face value of the checks in cash.

Several hours later, Amaury was arrested, and his property, including approximately $29,000, was seized by the United States government.

Amaury was subsequently indicted on conspiracy and cocaine related drug charges. On Feb. 16, 2010, the Drug Enforcement Administration issued a report that stated, “Amaury said that he acquired his approximately $29,000 by writing and cashing bad checks earlier that day. …”

There was no dispute that part of the property the government seized from Amaury included the $21,965.00 in cash that the check casher paid Amaury earlier that day.

Because the checks Amaury negotiated were worthless, upon learning of his arrest, the check casher wrote to Amaury, the assistant United States attorney in charge of Amaury’s case, and the DEA seeking the return of the funds.

On June 10, 2010, the DEA responded to the check casher’s letter, stating that the “time period to file a claim expired on May 6, 2010, as published in the Wall Street Journal.” The DEA also advised the check casher to file a petition for the return of the money, also knows as a petition for remission or mitigation.

On July 6, 2010, the check casher filed a petition with the DEA seeking the return of the seized money. The DEA sent “written notice of the seizure of the seized funds” to the check casher on Aug. 4, 2010, and advised the check casher to petition the DEA for the return of the property or to timely contest the forfeiture proceeding in federal court.

On Oct. 6, 2010, the DEA administratively forfeited the seized funds. The DEA’s official declaration of forfeiture stated, in pertinent part:
Notice of the seizure and intent to forfeit was published on the following dates 03/22/2010, 03/29/2010, 04/05/2010 and was sent to each party who appeared to have an interest in this/these properties. Because there were no claims filed for the property within thirty (30) days from the date of the last publication of the Notice of Seizure or thirty five (35) days from the date the Personal Seizure Notices were mailed, it is hereby declared that the property has been forfeited to the United States Government under the forfeiture law.

The government didn’t dispute that the actual notice was not sent to the check casher on the dates listed on the declaration of forfeiture; the government appeared to have viewed the check casher as a general unsecured creditor who did not have a legal interest in the forfeited property.

The DEA subsequently denied the check casher’s petition for the return of the funds on Nov. 29, 2010, and held fast to that conclusion after a petition for reconsideration was filed on March 29, 2011. That the check casher did not exercise its option to contest the forfeiture proceeding in federal court was also undisputed.

Amaury was sentenced on May 16, 2011. During the sentencing, the United States District Court for the Southern District of New York expressed concern regarding the government’s retention of funds that belonged to the check casher and recommended that the government release the $21,965.00 to the check casher.

As a result, on May 18, 2011, the court entered an Order of Restitution, which ordered Amaury to pay a total amount of $21,965.00 “less any award released to the check casher by the United States.”

Hires Lawyer

In June 2011, the check casher retained an attorney to assist it in securing the funds. As of April 2012, the check casher had still not received the funds and submitted a petition to the United States Attorney’s Office for the Southern District of New York for remission of $21,965.00.

Because the funds had since been forfeited and shared with local law enforcement, the USAO had to request that the Department of Justice invoke its “restoration procedures” to release the funds.

It was during this stage that the check casher filed a third-party claim seeking an order:
(1) releasing the sum of $21,965.00, plus interest, which was seized by the government from Amaury, and
(2) granting the check casher attorneys’ fees incurred in connection with the filing of its motion, under the Civil Asset Forfeiture Reform Act or, in the alternative, under the Equal Access to Justice Act.

Magistrate Judge

The dispute then went before a magistrate judge for the U.S. District Court for his report and recommendation.