In a recent Senate hearing, the Postal Task Force created by President Trump labeled USPS as “not sustainable.” Everyone is on the same page that USPS needs to shake things up to secure a healthier financial future. The billion-dollar question is: how? Postal banking could be the answer. For years, a hot topic of debate amongst USPS insiders has been whether or not the organization should offer basic banking services at Post Offices. Let’s take a look at some of the benefits of postal banking, and how it could help both American citizens and the US Postal Service.
Postal Banking Could Give All Americans Access to Basic Financial Services
First and foremost, postal banking would allow all Americans to access basic financial services such as deposits, savings accounts, and even small lending. Currently, big banks offer services such as savings accounts and loans, but they do so at a high charge. Local Post Offices could offer much lower rates on loans than large financial institutions…90% lower, to be exact. People would still need larger financial institutions for heavy-duty things like setting up brokerage accounts, of course. However, if you could get an extremely low rate on a small loan at your local Post Office, wouldn’t you?
Rural Americans Would Especially Benefit from Postal Banking
While postal banking would reach all US citizens, there’s no question it would benefit rural Americans in a huge way. Currently, big financial institutions tend to forget about rural parts of America. Sometimes, the nearest bank can be dozens of miles away for someone living in a remote part of the country! If USPS offered banking services, citizens of small, isolated towns could receive these services at their local Post Office. As a result, banking could reach people in even the most remote locations. After all, USPS’ enormous infrastructure is designed to reach every single address in the country!
Postal Banking Would Put A Lot More Money In USPS’ Pockets
Last but not least, the financial benefits to USPS from offering postal banking would be immeasurable. It’s no secret that the organization has been operating at a loss every year since 2007. This is because Congress enacted a law in 2006 that required USPS to set aside huge amounts of money to pre-fund future employees’ health and retirement benefits. USPS needs to find a way to generate more revenue in order to pave the way for a healthier financial future, and offering basic financial services to customers all across America could be just the ticket. In fact, some estimates indicate that postal banking could generate as much as $9 billion a year for the Postal Service! That’s a whole lot of cash, if we do say so ourselves.
Why Hasn’t USPS Considered This Before?
Simply put, the Postal Service long ago decided to focus solely on delivering the mail and shipping parcels for customers. The organization has stuck by the age-old adage of “do what you know, and do it well.” However, who’s to say what the future of USPS could look like? Postal banking might very well be a service that we can start utilizing in the next several years or so. As for now, USPS does currently offer money orders…but that’s as far as the organization’s financial services go at the moment.