|By Lindsay Wise, McClatchy Washington Bureau|
The plan, which was floated earlier this year in a special report by the
In the report, the inspector general suggested that post offices could fill a gap left by the dwindling number of bank branches in low-income rural areas and inner cities, generating an estimated
Without a new source of funding, the
Perhaps the most high-profile proponent of the inspector general's proposal is Sen.
Warren said the post office was an ideal venue to provide affordable financial products for families of moderate means whose needs weren't met by the traditional banking system.
In 2012, the senator noted, a quarter of U.S. households _ 68 million people _ spent an average of 10 percent of their incomes on interest and fees for check cashing and payday lending, about the same amount they spent on food.
If post offices teamed up with nearby credit unions or community banks, Warren said, they could provide similar services for less, potentially funneling millions more people into the traditional banking system.
"That's a win-win," she said.
For example, a hypothetical "Postal Loan" of
"That single loan from the
Critics of the proposal say postal employees don't have the experience or training necessary to offer financial products and the
Issa says the already-oversized agency should focus on breaking even instead of branching out into new ventures that its employees aren't trained to handle.
"Do the postal employees have the skills to be involved in financial activities beyond the exchange of dollars for money orders? The answer, of course, is no," he said last week at the Pew conference.
Most banks aren't fans of the idea either. They see it as government-sponsored competition, and they worry that the
"This new entity could be perceived by many as a government-endorsed and preferred provider of financial products,"
But a spokeswoman for the association said it might make sense for some credit unions to partner with the
More than 140 credit unions in 47 states are or have been affiliated with post offices, and this might be a good place to start, the spokeswoman,
For the greeting card company Hallmark, which is headquartered in
"That said, for this or any other new product or service to be helpful to the
But there's no guarantee that postal banking would make money rather than lose money.
"The cost is really where the rub would be, and a lot of this is going to depend on what the services provided are,"
"If the postal bank is just providing some safekeeping and payments, it can probably be done at a very low cost," Levitin said. "If it starts getting into credit services, I think it's going to be a much more complicated conversation. . . . The devil's going to be in the details."
A survey released this month by the
But among people who already use alternative financial services such as check cashing and payday loans, 81 percent said that if a nearby post office offered such services at a lower price, they'd be likely to use them.
"I would be one of those people that asked to use a magnifying glass before I signed anything," said Wetzel, who had a bad experience paying back a high-interest payday loan after she lost her job several years ago.
"Would a government-run office do any better than the people running them (payday loans) now? I don't know," she said.
A BRIEF HISTORY OF POSTAL FINANCE
Offering basic financial services through the post office isn't a new business model. It's commonplace in
Starting in 1911, the Postal Savings System allowed Americans to deposit money at post offices nationwide. Competition with banks was minimized by limiting deposits to
At its peak in 1947, more than 4 million Americans had
When banks raised interest rates after
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