With the gap between the lower and middle classes growing and the Postal Service failing, new ideas are being explored to better serve America’s poor by simultaneously restructuring the post office as a financial service. A report from Feb. 4 claims altering the U.S. Postal Service as a payday loan center can kill two birds with one stone.
A report from the Inspector General cites over a fourth of the U.S. population, roughly 68 million Americans, are poor and rely on payday loans and cash-checking services for their financial needs. The businesses that offer these services include laughably high interest rates, which cause those living paycheck to paycheck to dive even further into debt. In 2012, underserved Americans spent around $89 billion in interest and fees associated with payday loans and cashing checks.
Most banks do not operate a branch in impoverished neighborhoods, payday loan and check cashing service centers do. The Postal Service already includes the basic financial infrastructure, such as money orders, to provide credit and payment services to non-banking Americans. The report details a more affordable alternative to payday loans will alleviate the financial pressure the underserved people face, nevertheless help the Postal Service create some revenue they’re desperately hurting for.
The report was published about a week ago and already has the support of at least one public servant. Senator Elizabeth Warren (D-Mass.) praised the proposal in an op-ed published on the Huffington Post.
"If the Postal Service offered basic banking services -- nothing fancy, just basic bill paying, check cashing and small dollar loans -- then it could provide affordable financial services for underserved families, and, at the same time, shore up its own financial footing,” Warren writes.
Shutting down the U.S. Postal Service seems to be out of the question. Ideas will be explored until there is a plausible manner for the USPS to get out of the red; for now, this seems to be it.