First Steps Taken in Postal Banking Pilots

(This article first appeared in the November/December issue of the American Postal Worker magazine)

In September, the Postal Service and the APWU announced that they had begun partnering on a limited proof-of-concept test of expanded postal financial services in a small number of post offices. The announcement was a welcome development after years of campaigning by the APWU, the Campaign for Postal Banking and many others to expand the types of financial services available to the public at post offices across the country. Specifically, the September announcement was that the USPS would now accept payroll and business checks, up to $500 in value, as a means of payment for the existing prepaid Visa gift card that is on offer in post offices around the country. The test sites in the initial phase of the project are limited to just four stations in Northern Virginia, Washington, DC, Baltimore and the Bronx.

While the initial rollout falls well short of the Campaign’s demands for a broad pilot of a number of expanded postal financial services, news of any movement on the part of the Postal Service is a welcome development.

APWU and the Campaign for Postal Banking fully expect to keep pressing postal management to broaden and expand the tests as soon as possible.

“Postal workers are excited by this first step in expanding the financial services we offer,” said President Mark Dimondstein. “This is a small step in a positive direction. We’re confident that expanded services will be a win for the people of the country, a win for the Postal Service itself, and a win for postal workers who are extremely dedicated to their mission.”

The Campaign for Postal Banking has long held that the Postal Service is ideally situated to help address the needs of more than 80 million people who live in unbanked and underbanked households across the country. The check-cashing service being tested at the four sites is one of several services the USPS could offer at much more affordable rates than predatory check-cashing counters found across the country. Today, millions of people are forced to use these shady businesses that often charge as much as 10 percent of the face value of a check just to cash it. While the USPS is offering this service at $5.95 at the test locations, Campaign advocates are urging them to adopt a lower price that will better position the USPS relative to the predatory AFS industry.

The other services the Campaign has long sought the USPS to pilot include a bill-payment service, expanded international wire services, a post office-to-post office domestic wire service, and ATMs to allow customers to affordably access their own money. Put together, these modest expanded services could produce up to $1 billion in additional revenue for the Postal Service, according to a 2015 study by the Postal Service Office of the Inspector General.

Proponents of postal banking should be encouraged by these first steps, but not yet satisfied. There’s little doubt that the Campaign’s work, together with the determination of the APWU to move the pilots forward, has moved the Postal Service to act this fall. Nonetheless, the need remains to expand the test sites to many more post office locations, together with the other yetunrealized services.

Opponents of postal banking have already begun organizing. The American Bankers Association, the Consumer Bankers Association and the National Association of Federally-Insured Credit Unions all issued statements panning the developments. Conservative lawmakers, including Rep. Patrick McHenry (R-NC-10), the ranking member on the House Financial Services Committee, wrote to the Postmaster General expressing their dismay about the developments.

It’s clear now that advocates and supporters of the Campaign for Postal Banking will have to redouble our efforts to push the Postal Service forward to expand these tests and offer the country a real taste of expanded postal financial services. More details on our fight ahead in the next edition of this column!