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.

Posted in Spring 2014.