Expanding Low-Cost Financial Services through the United States Postal Service is a Way to Put More Money into the Pockets of Low-Wage Workers and to Provide Banking to Americans in Rural and Urban Areas with Few Banking Options
United for a Fair Economy, One of the Coalition’s Founding Members, Releases New Report On Martin Luther King’s Birthday, that Shows that Nearly 100 Million Poor and Working Class Americans Pay $89 Billion Each Year to Payday Lenders, Pawn Shops and Check Cashers
WASHINGTON – Financial reform groups, joined by postal unions and others from organized labor, announced today the creation of a national campaign to expand banking services. “The Campaign for Postal Banking” proposes to expand access to affordable financial services through the United States Postal Service’s 31,000 retail branches.
Today, 28 percent of U.S. households, representing 93 million people, do not have access to affordable financial products such as the ability to cash a check, transfer money or pay a bill at a reasonable fee. Americans who lack these services, what some call the “unbanked” or the “underbanked,” find that traditional banks are out of reach due to geography or because of high fees and other obstacles. Limited access drives millions to rely on costly, predatory services such as check cashing stores and payday lenders, trapping many in a cycle of debt. Some payday lenders charge as much as 400 percent in annual interest. The average low-wage worker using these “legal loan sharks” pays an incredible $2,400 per year in fees for these services.
“Much of the national debate has focused on how wages have lagged for working Americans in recent years,” said American Postal Workers Union President Mark Dimondstein. APWU is one of the coalition’s members. “As a society we need to find ways to boost wages and create and keep living wage jobs,” said Dimondstein. “We also need to find ways to cut costs for low-wage Americans. Postal banking is a way to cut costs and put money back into the pockets of people barely getting by.”
The APWU and other partner organizations that have formed the Campaign for Postal Banking find that the United States Postal Service (USPS) is in a unique position to provide basic, affordable, consumer-driven financial services to these underserved communities and individuals who live in what are often called “bank deserts.” The USPS has more storefronts than any other retailer. A third of the nation’s zip codes have access to a post office but lack a traditional bank.
A report released today by another one of the coalition partners, United for a Fair Economy, entitled Underbanked and Overcharged, makes the case for how postal banking will benefit the poor and low-wage workers.
A report released last year by USPS’ Inspector General called Providing Non-Banked Financial Services for the Underserved explains how an expansion of financial services would fill a great social need and strengthen the finances of the Postal Service.
USPS is not a latecomer to banking services. From 1911 to 1967, the U.S. Post Office offered savings deposit accounts and currently sells more money orders than any other institution. Anyone who goes to a postal window and pays with a debit card anywhere in the United States also is offered the option of getting cash back.
Postal systems around the world – including France, Italy, Japan, China, Brazil, India, and New Zealand offer financial services and play important roles in advancing financial inclusion and literacy.
Campaign for Postal Banking is a coalition of consumer, worker, financial reform, economic justice, community, civic, and faith-based organizations building a movement to inform and mobilize the public to call on the United States Postal Service to take the necessary steps to restore and expand postal banking at its branches across the country. Founding members include:
Alliance for Retired Americans
Americans for Financial Reform
American Postal Workers Union
Center for Study of Responsive Law
Coalition of Black Trade Unionists
Interfaith Worker Justice
National Association of Letter Carriers
National People’s Action
National Postal Mail Handlers Union
National Rural Letter Carriers Association
United for a Fair Economy