The Post Office Can Bring People-Centered Public Banking to Every ZIP Code

Steve HutkinsBlog, News The need for a public banking option is urgent. Nearly 10 million households, a disproportionate number of whom are people of color, are unbanked or underbanked in the United States.

Unbanked or underbanked households must pay expensive fees for non-bank financial services to access their own money for paying bills, cashing checks, remittances, rent, and ATM withdrawals — costing upwards of $2,400 annually.

The widely trusted U.S. Postal Service has a long history of postal banking and is physically located in every community, making it the sensible option to provide a public banking solution. But this requires a good faith effort, done well.

A new report, “Banking Fair: The Promise and Urgency of Doing Postal Banking Right,” by the Save the Post Office Coalition, Take On Wall Street, and Americans for Financial Reform Education Fund, calls for a public banking option to be restored within USPS.

The Post Office has a long history as a public service institution, despite the seeds of privatization sown by Republican presidents and Congress since 1970. Up until the 1960s, many relied on the trusted postal savings system over private banks after banking scares in the early 1900s.

“Banking Fair” provides an eye-opening analysis of how USPS leadership is thwarting efforts to revive a postal banking option by halting a new check-cashing program won by advocates in 2021. They are also refusing to roll out the additional financial services — bill payment, wire transfers, and low-fee ATMS — that the USPS Inspector General has already deemed legal for the agency to provide.

The paper outlines the weaknesses with the current state of the USPS check-cashing pilot program, which has stalled at four post offices that serve wealthier zip codes, faced gratuitous legal challenges by the conservative Postal Regulatory Commission — a Trump-era holdover — had little marketing to let people know the product exists, and only covers checks below $500 for a hefty $5.95 fee.

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