Consumers want and need access to affordable financial services. The US Postal Service is in a unique position to offer basic financial services for the following reasons:

Location (every community across the country)

Trusted and Well-Liked

Already offer financial services

Mandate to serve the public

USPS: Location

The USPS, with more than 30,000 retail locations, is the world’s largest retail network. Here’s how that compares with other large retail networks:

Walmart = 5,163 stores[i]



Starbucks = 11,962 stores[ii]



Payday lenders = 22,000 locations[iii]

And many of those post offices are located in bank deserts. Fifty-nine percent of post offices are in zip codes with either zero banks (38%) or only one bank branch (21%).[iv] The Postal Service is geographically well-positioned to reach people with little-to-no access to retail banking services.

USPS: Public Trust and Confidence

Americans rank the USPS highest among all federal agencies with more than 70% of those polled saying it does an excellent or good job.





Millennials love the USPS the most! According to a November 2014 Gallup poll, the age group that ranks the USPS highest is 18-29 year-olds, at 81%.[v]





Compare confidence in the USPS with confidence in: Payday lenders: 18%[vi] Banks: 26%[vii] USPS: 68%[viii]



USPS: Mandate for Universal, Affordable Service

The USPS is legally obligated to serve all Americans, regardless of geography, at uniform price and quality: “The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. … It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.”[ix] The USPS is prohibited from making certain decisions based on profit, e.g. closing a post office solely for financial reasons.

The Postal Service isn’t in business to make a profit. Its purpose is to serve the American people. This is in stark contrast to the predatory practices of upselling products and selling under unclear terms and conditions associated with alternative financial services such as payday lending.

USPS: Financial Services Offered Now

Money orders – 95 million paper money orders worth $21 billion and 70% of the market[x]





International paper and electronic money orders





Cashing of treasury checks





Gift cards

USPS: Security

Tampering with the U.S. mail is a federal offense. The sanctity of the mail is safeguarded by the Postal Inspection Service which investigates postal-related crimes, such as identity theft, mail bombs, postal robberies, and burglaries.

USPS: Skilled Workforce

USPS window clerks processed 500 million money order transactions over the past five years at a face value of $110 billion. That adds up to 378,000 money orders per day in 2014.[xi] Clerks receive extensive training, including certification with annual renewal under the Bank Secrecy Act. In addition, all Postal workers take the federal employee oath of office to support and defend the Constitution.

USPS: We’ve Done It Before

The Postal Savings System operated from 1911 through 1966, accepting savings deposits guaranteed through the full faith and credit of the United States. By 1947, postal banks had $3.4 billion in assets (more than $35 billion in today’s dollars) or about 10 percent of the entire commercial banking system. [read more]

USPS: They Do It Everywhere Else

Posts around the world successfully offer financial services resulting higher rates of financial inclusion as well as revenue for the post office.

1.5 billion consumers worldwide[xii]





14.5% of postal revenue on average in industrialized countries in 2012[xiii]

Examples of International Postal Banks[xiv]

New Zealand’s Kiwi Bank was created in 2002 to counter the growing trend of Australian mega-banks which by 2001 controlled 80% of New Zealand’s retail banking, with profit going abroad and branches closing. With the help of a Move Your Money campaign, out of a population of 4 million, the KiwiBank attracted 500,000 customers in its first five years.

Japan Post Bank is the largest publicly owned bank in the world and is the holder of one-fifth of the nation’s debt.

Customers of India’s postal bank opened 30 million new postal savings accounts in 2012.[xv]

In Italy, 80 percent of the postal service’s revenue comes from financial services, with 5.8 million customer accounts.[xvi]

La Poste in France offers an account, called the “Livret A”, with no opening fee, a very low initial deposit requirement (about $2), and affordable services and features.[xvii]

SOURCES

[i] Wal Mart Stores Inc Form 10-K, Fiscal Year 2015, p. 127.

[ii] Starbucks 2014 Annual Report, pp. 4, 6.

[iii] Center for Responsible Lending, Fast Facts-Payday Loans.

[iv] Federal Deposit Insurance Corporation, FDIC 2013 Summary of Deposits; Postal Service facilities database, as cited in Office of Inspector General, USPS, Providing Non-Bank Financial Services for the Underserved, January 27, 2014.

[v] “Americans Rate Postal Service Highest of 13 Major Agencies,” Steve Ander and Art Swift, Gallup, November 21, 2014.

[vi] Poll Results: Post Office Bank, YouGov, February 10, 2014.

[vii] Americans’ Confidence in Banks Up for First Time in Years, Gallup, Dennis Jacobe, June 13, 2013.

[viii] Atym, United States Postal Service Brand Survey, April 21, 2012, as cited in Office of Inspector General, USPS, Providing Non-Bank Financial Services for the Underserved, January 27, 2014.

[ix] 39 U.S. Code § 101 – Postal policy https://www.law.cornell.edu/uscode/text/39/101

[x] U.S. Postal Service Office of Inspector General (OIG), Digital Currency: Opportunities for the Postal Service, RARC-WP-12-001, October 3, 2011, p. 31 as cited in Office of Inspector General, USPS, Providing Non-Bank Financial Services for the Underserved, January 27, 2014.

[xi] “Postal Money Orders Processed by the Federal Reserve,” Board of Governors of the Federal Reserve System, February 18, 2014.

[xii] Universal Postal Union, About Financial Services.

[xiii] Universal Postal Union, Development Strategies for the Postal Sector: An Economic Perspective, 2013.

[xiv] “Saving the Post Office: The Models of Kiwibank and Japan Post,” Ellen Brown, webofdebt.com, January 9, 2012.

[xv] Universal Postal Union, 2013 Global Forum on Financial Inclusion for Development.

[xvi] Canadian Centre for Policy Alternatives, Why Canada Needs Postal Banking as cited in Office of Inspector General, USPS, Providing Non-Bank Financial Services for the Underserved, January 27, 2014.

[xvii] La Banque Postale (in French)