By Mike Moen
ST. PAUL, Minn. — The combination of cash-flow problems for the U.S. Postal Service and the lack of access to financial services for many Americans is renewing calls for postal banking services. Supporters say the move could benefit a large number of Minnesotans struggling during the pandemic.
The coronavirus crisis is highlighting funding problems for the Postal Service. Stephen DeMatteo, executive assistant to the president at the American Postal Workers Union, said the situation is dire.
“The economy has ground to a halt,” DeMatteo said. “And early projections suggest that mail volume could fall by as much as 50% by the end of the summer.”
The Postal Service already has been dealing with revenue declines over the past two decades. President Donald Trump and other Republicans have resisted a financial rescue, and instead want the Postal Service privatized.
Meanwhile, the average underserved household spends roughly 10% of their annual income on banking fees and interest. DeMatteo said that’s why allowing post offices to have a banking component would give struggling families better options during difficult times.
Branches could offer services such as paycheck cashing, ATMs and small loans. And DeMatteo said while these banking services would give the Postal Service some much needed revenue, it would not put profits ahead of public service.
“If the Postal Service could offer a low-cost alternative to the payday lenders and the loan sharks and the check-cashers that are out there, we think working-class and lower-income people would really stand to benefit,” he said.
DeMatteo said for those who don’t have access to a checking account, it could take several weeks to receive stimulus checks by mail, and that’s where alternatives would be helpful. He said some proposals for postal banking already could be implemented without congressional action, but others would require approval.