Postal banking could benefit millions

The US Postal Service’s Office of Inspector General (OIG) recently issued a report showing how postal banking could be expanded.

Post offices already provide limited banking services such as the sale of money orders, the most widely used alternative banking service in the US.

Expanded postal banking would make safe and affordable basic banking service available at local post offices for all postal customers, especially those living in rural and urban communities that are either not served or under served by traditional banks.

After the OIG report was released, unions representing employees of the Postal Service issued statements supporting postal banking.

“It’s a no brainer,” said Mark Dimondstein, president of the American Postal Workers Union (APWU). “The Inspector General’s report confirms that the Postal Service can act now to provide consumers with affordable financial services while strengthening the public Postal Service.”

APWU is currently negotiating a new collective bargaining agreement with the Postal Service and postal banking is one of its priority bargaining proposals.

“We look forward to the day when people can get their checks cashed by their trusted neighborhood (postal) clerk,” added Dimondstein.

A statement by the National Postal Mail Handlers Union issued in response to the OIG report said that the union supports legislation that will expand financial services at post offices.

Fredric Rolando, president of the National Association of Letter Carriers, praised the OIG’s report and said that postal banking has worked for years in other countries.

“(The OIG’s postal banking) model has been successful in many other countries and has the potential, according to the OIG, to generate at least $1.1 billion of revenue annually, which would allow the Postal Service to continue its innovative efforts,” said Rolando. “The OIG’s recommendations are a good place to start, and we urge the Postal Service to take steps to immediately pursue these opportunities to fill the unmet needs of those in under served communities.”

The OIG’s report, entitled “The Road Ahead for Postal Financial Services,” lays out four approaches for establishing postal banking.

Approach #1 would expand financial services that post offices are already authorized to provide including the sale of money orders ($21 billion in 2014), electronic money transfers, check cashing, bill paying, and postal operated ATMs.

At some point, the OIG would like to make more financial services, such as affordable interest-rate loans and savings accounts, available at post offices.

Between 1911 and 1966, the US Postal Services did offer postal savings account, but pressure from the banking industry ended this service.

Postal loans are available to postal patrons in UK at affordable interest rates.

Implementing postal lending and saving services would require legislative action.

Making these services available at post offices would be a great service to the 68 million people who live in communities under served by traditional banks.

According to the Campaign for Postal Banking, one in 13 US households doesn’t have a bank account. One in four households live in communities under served by banks.

Traditional banks have pulled up stakes in many of these communities. The banks have been replaced by the alternative financial services industry–check cashing stores, payday lenders, auto title lenders, etc.

They charge high fees and interest for the services they provide.

The average under served household, whose annual income is $25,500, spends $2,412 a year on fees and interest charged by alternative financial services companies.

Postal banking would provide an affordable alternative to the high-cost alternative financial service industry.

Postal banking would also provide easy access to financial services,

There are more than 30,000 post offices in the US, considerably more retail outlets than other large retail companies.

Many of these post offices are located in communities that have been deserted by banks. The Campaign for Postal Banking reports that 59 percent of US post offices are located in zip codes where either no bank (38 percent) or only one bank (21 percent) is located.

The OIG reports that the Postal Service has the infrastructure and the capacity to provide financial services to its customers. Expanding those services “would help the Postal Service improve the lives of millions of Americans as it fulfills its universal service obligation.” said the OIG report.

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Postal workers fight for contract that improves customer service

During a May 14 Day of Action by the American Postal Workers Union (APWU), the union and a broad coalition of supporters called for a new collective bargaining agreement that improves customer service.

The current collective bargaining agreement expires on May 20, and the union and the US Postal Service (USPS) have been bargaining since February for a new agreement.

APWU has put forward a number of contract proposals to improve customer service, including halting post office closures, expanding post office operating hours, bringing back overnight delivery of first class mail, and expanding services available at post office.

“What we are fighting for . .  .  is good postal service, living-wage jobs, and a good contract, now!” said APWU President Mark Dimondstein at a Day of Action rally in Washington DC. “The American Postal Workers Union and all of you are fighting for the people of this country, for a vibrant public Postal Service for generations to come. That’s what the people deserve and that’s what the people should have.”

The Washington DC rally was one of 130 Day of Action events in 42 states, Puerto Rico, and the Virgin Islands.

Postal workers were joined by supporters from a number of community and labor organization who are standing with postal workers in their fight to protect and improve postal services.

“We are sending a clear signal that we are fighting a struggle and we plan to win that struggle,” said the actor Danny Glover at the Washington DC rally. “We are not just supporting postal workers. We have the chance not only to save the post office, but to change the nature of how we deal with the public.”

Glover also talked about one of the union’s contract proposal–postal banking.

The union is proposing that USPS provide basic banking services such as check cashing, bill paying, and small loan lending at post offices.

Banks have largely abandoned communities with high concentrations of low-wage workers.

Banks in these communities have been replaced by payday lenders, which charge high interest rates, and check cashing companies, which charge fees.

Postal banking would provide a banking alternative in these under served communities.

The union’s fight to expand services and protect the ones that many of us take for granted comes at a time when the Postal Service is under attack.

According to its critics, the US Postal System is in a state of crisis that demands cuts in services rather than their expansion.

But this so-called crisis is one that has been manufactured by those who want to dismantle the Postal System and privatize its most lucrative services.

It began in 2006 when Congress passed a law that required USPS to pre-fund its retiree health care benefit for the next 75 years with billions of dollars of payments over a ten-year period.

Pre-funding retiree health care, a practice that no other private company or government entity does, has siphoned away an average of $5.6 billion a year away from postal services.

Without this unique and unprecedented pre-payment requirement, USPS would have generated a $1.1 billion surplus in the first quarter of fiscal year 2015. For fiscal year 2014, the surplus would have been $1.4 billion and for fiscal year 2013, it would have been $600 million.

But instead of surpluses, pre-funding has burdened USPS with deficits, which have led to cuts in services.

In January USPS implemented a new round of cuts that among other things virtually eliminated overnight delivery of first class mail.

Previous cuts caused the closure of 140 mail processing centers and under staffing, both of which have slowed mail delivery.

Eighty-two more mail processing centers are scheduled for future closings.

Critics say that the internet has made the Postal Service irrelevant and that most of the work it does can be done better by private companies.

But USPS, which provides service to every community regardless of whether it is profitable to do so, remains an important catalyst for commerce and communication.

In 2014, USPS delivered 155 billion pieces of mail. In January 2015, letter volume increased by 7 percent and package delivery increased by 14 percent over January 2014.

USPS provides these services efficiently and effectively. A test conducted by Consumer Report in 2014 found that USPS outscored Fed Ex and UPS, its privately-owned competitors, in convenience and reliability.

USPS also was less expensive than its competitors 92 percent of the time in next-day and second-day deliveries.

The importance of the Postal Service to the everyday life of the American people is one of the reasons that people like Danny Glover are joining the Grand Alliance to Save Our Public Postal Service.

“We have a Grand Alliance that is saving this national treasure that belongs to us,” said Glover referring to the Postal System. “We will make sure that it remains in our domain.”

Glover urged people to show their support for postal workers and the public Postal Service by signing and sending a postcard of support to the Postmaster General.