Banking on the Post Office

Postmaster General Louis DeJoy has been on the job since July, two months. He is eminently qualified for the position, having been a major donor—more than $2 million—to the current occupant of the White House and the Republican Party. He has no post office experience but does hold investments in companies who compete with the Postal Service.

At a public meeting of the U.S. Postal Service’s Board of Governors DeJoy spoke to the coming election and the likely surge of mail-in ballots. One would expect that a person new on the job would see this as an opportunity to exercise leadership and meet the challenge of delivering citizens’ votes. One would expect him to be urging lawmakers to provide support for this urgent undertaking.

Instead, Mr. DeJoy is so far best known for banning overtime at the expense of prompt delivery of mail. He said that U.S.P.S. has its operational standards and it is up to election officials in the various states to adapt their procedures to U.S.P.S. capabilities.

Mr. DeJoy most recently has shuffled the top leadership at the U.S.P.S. Skeptics believe the purpose is to eviscerate operational experience prior to the election.
Rather than desiccate the Postal Service, how about looking into ways it can be a more robust service provider? While banks are closing branches, the U.S.P.S. could step in and provide services to the “unbanked.” More than one out of four households in the U.S. either do not have a bank account or cannot maintain a large-enough cash balance to avoid high fees on the account. Many live in areas without a bank branch nearby. More branches have closed during the COVID-19 pandemic. Without banking services, lower-income people are prey for predatory payday lenders and check-cashing stores.

The United States Postal Savings System operated from 1911 to 1967. Customers could open small savings accounts at their nearby post office. The Post Office deposited the money with commercial banks and kept a small percentage of the interest for handling the transactions. The U.S. government guaranteed the deposits should the bank fail. (Now the F.D.I.C. insures deposits.)

With thirty-thousand locations around the country, the U.S. Postal Service could use its present statuary authority to expand its money order services, cash checks, allow customers to pay bills at the post office, install ATMs, and expand and enhance wire transfer services. As a quasi-government agency, the U.S.P.S. has the infrastructure and the staffing in place to provide services to clientele that the banks perceive as unprofitable. France, Italy, Japan and New Zealand are among the countries that provide these services to their citizens. The Post Office in Great Britain has partnerships with commercial banks that enable account holders to make simple transactions—deposits, withdrawals, bill pay—at a local post office.

The U.S. House of Representatives in June 2019 passed an amendment to a federal appropriations bill expressing support for the Postal Service to exercising its existing authority to offer basic financial services. Louis DeJoy has not offered an opinion on this.


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