A paper released by the U. S, Postal Service's inspector general suggests that the agency might be able to bolster its bottom line by offering bank-like services to low income individuals, and congressional Democrats are getting on board.
The
white paper released by the Office of the Inspector General projects that the post office could bring in $8.9 billion per year by providing "non-bank financial services" to people who don't have bank accounts and resort to using payday loan and check cashing services to get by.
The services the post office could provide include prepaid check cards and small loans at a much lower cost than is usually charged by payday loan services.
According to the report, this "underserved population" makes up about 68 million adults, who spends an average of $2,412 per household on such services and in 2012 spent about $89 million.
Democratic lawmakers are getting behind the idea saying that it would not only help the struggling postal service, which has operated in the red for seven years, but also for low income individuals, who don't have access to major banks,
The Hill reported.
Even before the report, Rep. Elijah Cummings, D-Md., proposed a measure to give let the post office offer check cashing services.
Another Democrat, Sen. Elizabeth Warren of Massachusetts also endorsed the recommendation in an
opinion piece she wrote for The Huffington Post.
"If the Postal Service offered basic banking services — nothing fancy, just basic bill paying, check cashing, and small-dollar loans — then it could provide affordable financial services for underserved families and, at the same time, shore up its own financial footing," Warren wrote.
However, Republicans and bankers aren't so quick to get on board, noting that the post office has done such a poor job of managing its other operations.
"They can't even deliver your mail on time," Camden Fine, head of the Independent Community Bankers of America, told The Hill. "The track record speaks for itself. If this was about competition, give me all the sloppy competitors I can get."
Republican Rep. Jason Chaffetz of Utah also balked at the idea.
"There are unique things that the Postal Service can offer," Chaffetz said. "But being your local loan shark is not one of them."
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