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Should the U.S. Postal Service get in the check-cashing business?

April 2, 2014

By Jeremy Quattlebaum, Student Voices staff writer

How often do you use snail mail to send a letter or pay a bill? It’s probably a rare occurrence, and that’s one reason the U.S. Postal Service has been struggling financially for years.

The agency has posted $26 billion in net losses since 2011 because of a sharp decline in mail volume and a congressional requirement that it make advance payments on future retirees’ expected health care costs. The Postal Service is an independent agency of the federal government that receives no direct tax dollars for its day-to-day operations, but it is subject to congressional control. Article I, Section 8, Clause 7, of the Constitution gives Congress the power and the responsibility: “To establish Post Offices and post Roads.”

Some of its proposals to solve its financial predicament – cutting Saturday delivery and closing post offices – have been blocked by Congress.

But the Office of Inspector General of the U.S. Postal Service has come up with a new plan to help the struggling Postal Service become profitable: For starters, letting you cash your paycheck at a post office.

In the United States, 68 million people are underserved by banks, meaning that they live in areas where there are few banks, if any, or they don’t have bank accounts or regular access to a bank account. The FDIC, the regulatory agency that oversees banks, estimates that 8 percent of Americans do not have any type of bank account or connection to a bank. This means that every time they need to cash a check, they have to go to a check-cashing business. And these services are expensive.

Check-cashing outlets charge high interest rates or fees. Sen. Elizabeth Warren (D., Mass.) says that these check-cashing services cost households $89 billion in 2012 and that mostly low-income people use the services. “The poor pay more (for banking services), and that’s one of the reasons people get trapped at the bottom of the economic ladder,” Warren wrote in a Huffington Post blog entry.

“USPS could partner with banks to make a critical difference for millions of Americans who don’t have basic banking services because there are almost no banks or bank branches in their neighborhoods,” Warren wrote.

The inspector general’s report recommends that the Postal Service, which already sells money orders, extend its basic banking services by first offering reloadable debit cards, much like companies such as T-Mobile and Walmart.

The report says the Postal Service could earn $8.9 billion a year if it captured just 10 percent of the interest and fees generated by the 86 million Americans who are underserved by banks. The inspector general also says that the plan offers a public service by helping low-income Americans who are underserved by banks.

“The physical presence is already there to serve the needs of Americans,” Charles Crum, an economist in the Inspector General’s Office told the Washington Post. The Postal Service has 32,000 locations. “Also, the Postal Service is not beholden to shareholders to maximize profits,” so it could keep fees low, Crum said.

While banks don’t have much interest in setting up in small, rural towns or economically depressed areas, they still aren’t excited that the Postal Service might be competing on their turf. Ken Clayton, chief counsel for the American Bankers Association, a banking lobbying group, told the Washington Post: “We’re deeply concerned that the U.S. Postal Service is trying to drive the creation of a new [government-sponsored entity] engaged in banking services, which is not subject to the same level of regulation.”

“This new entity could be perceived by many as a government-endorsed and preferred provider of financial products,” he said. “The impact on banks already serving these communities would be substantial.”

Some experts also question whether the Postal Service can actually make money from financial services. James Campbell, a consultant on postal policy, told Time magazine: “It doesn’t sound crazy, but it doesn’t sound like a big moneymaker, either.” He said the plan also did not address the steep decline in mail volume.

What do you think?

Should Congress let the Postal Service offer check-cashing and debit-card services? Would that be fair competition for private businesses? Is helping underserved individuals important? Join the discussion and let us know what you think!
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Comments
6/12/2014
Stroudsburg PA
Taher
Mr.Hanna/Stroudsburg JHS
I believe that congress should allow cash credit and debit card services. I believe it would be fair competition because not everyone would immediately switch to the postal service. I think understanding individuals is important because with this type of service you would have to have the people in mind to get them to join.

4/21/2014
Irving/TX
Evila
Bradley/Nimitz
Congress should let the Postal Service offer check-cashing and debit-card services because everyone will benefit. The Postal Service is in danger of falling out of use due to the technological advances, and this would be a way to keep it afloat. Many still depend on the Postal Service, and it should remain running. Meanwhile people who are underserved by banks will benefit. For people living in poverty every penny counts and check cashing services can become rather expensive. This would not only help the Postal Service but also those living in rural areas where banks are few and far in between. The Postal Service would go in areas where banks are sparse, so the banks won't lose a substantial amount of income. It is fair competition and many will benefit.

4/21/2014
Irving/Texas
Yesenia
Bradley/Nimitz
Allowing the Post office to offer check-cashing and debit card services would be unfair to the private businesses. Yes it probably will help the banks in their economic problems but then we would be putting the private business in problem where their main source of economic flow is the check-cashing service. Helping the undeserved individuals is also important and helping them with a cheaper service of cashing in checks would help but not without hurting anyone else. The post office should be able to cash in checks but at about the same rate as a private business that way it's just a question into what is more conveniently on the way. By doing this private business still have some business and banks can get a little bit of help as well.

4/21/2014
Irving/Texas
Jose L
Bradley/Nimitz
Much like many people out there in the community I was very oblivious to what goes on with public services like the Postal Service. Apart from my common sense knowledge about the USPS I have heard news about how it being outdated due to technological advances in communication. After reading reading this article the proposed plan seems very interesting to me. It is actually something I can relate to very much. I don’t have a bank account, use check cashing services, and know how expensive they may get -especially when you try to stretch every penny. Taking all this in consideration, I personally believe that this new plan would be incredibly helpful to people like myself or especially those in even worse situations than mine. From a business standpoint though I do agree some private businesses would fall. Economically I would say it is critical to help underserved individuals. The less people in poverty being fed by the federal government would mean more individuals contributing into the economy.

4/18/2014
Irving/Texas
Michael
Bradley/Nimitz
Congress should let Postal Service offer check - cashing and Debit-card services.Money is money and I believe people should have the choice to spend their money however they want. Also anything that is profitable would benefit the Postal Service. If the Postal Service introduce check-cashing and Debit-card services, Private business's will definitely have competition; a fair one beacuse the Postal Services would certainly not get rich off of it! In this World it is good to have all kinds of people, so the more people we help, the better.

4/18/2014
Irving/TX
Janet
Bradley/Nimitz
I think that the Post Offices in the U.S should offer check cashing if itwill bring them profit and fix their financial predicament. Not only will it benefit the Postal Service as a whole, but it can also benefit Americans that don't have regular access to a bank account. It is fair competition for private businesses because they can also create better offers. Helping underserved individuals is important because the impact would be substantial.

4/18/2014
Irving/Texas
Jessi
Bradley/Nimitz
Congress should let the Postal Service offer check cashing and debit card services because of the convenience. Since snail mail is slowing down it would encourage job creation. The competition for private businesses will be enhanced but each system will have advantages and disadvantages. If anything, this change could be the last shot for the postal service to maintain its place.

4/18/2014
Irving/Texas
Monica F.
Bradley/Nimitz
I believe that Congress should let the Postal Service offer check-cashing and debit card services, because that could give them more business. I also think that this is fair to the others, because while it may give Postal Services more income, it wouldn't completely take away the other companies' sources of income - it would just take a little while to have everything balance out, also, individuals who may not have any-time access to banks could really benefit from this, and it's important for them to get it, because they deserve it.

4/18/2014
Irving/Texas
Isabel
Bradley/Nimitz
Congress should let the Postal Service offer check-cashing and debit-card services because it would allow for less of an inconvenience for when people have to cash checks. Doing so might even get the postal services out of the financial rut that they're in. The banking businesses could partner with the postal service in order to create a system that will benefit not only the people, but also the postal service and it will not take away from the bank's business.

4/18/2014
Irving/Texas
Berenizes
Bradley/Nimitz
The U.S Postal Service has been struggling financially for a couple a years now with all the faster ways to send items. I believe they should be able to get into check-cashing business if it will bring them more profit and keep them in business. Not only would it benefit the US Postal Service, but it would also benefit those who are in areas where it is extremely difficult to get to a bank. Another issue concerning this topic is private business complaining about the competition. The way I see it is since the US is a free market system then there is going to be competition. Why shouldn’t the USPS benefit from the system that everyone else seems to benefit from?

4/18/2014
Irving/Texas
Pam
Bradley/Nimitz
Congress should allow for the Postal Service to offer check-cashing and debit-card services. It would be fair with other businesses because it is true that many people who live in rural areas might not have the same type of access to banks as those who live in more urban areas, where banks are more populous. They would be reaching a new type of client. Helping those who are underserved is very important because they are still clients and they have money to spend, so why not spend it at the Post Office and help it raise money.

4/18/2014
Irving, TX
Josh A
Bradley/ Nimitz
Congress should let the Postal Service offer check-cashing and debit-card services because money is money. Anything that is profitable will greatly benefit the Postal Service, and the company will at least make more than they are currently profiting off. Moreover, this will reduce travel cost and help out those that don't live near banks and also help under served individual nor have a bank account. However, this does cause a disturbance between the Postal Service and private businesses. But, the private businesses would have fair competition because how can a postal service company greatly affect a rich private business?

4/16/2014
Irving/Texas
Erin D
Bradley/Nimitz
The United States Postal Services should be allowed to take part in this check-cashing program that is proposed. The post office is very important to our country in several ways, this is how we send care packages to our troop and it gives tangible bills that could later be paid online, not to mention how many citizens these posts supply. Because of this I feel the USPS should do whatever it takes to keep their doors and services running. As for those bankers who don’t even plan to outreach to smaller rural or economically depressed, they aren’t losing business. The USPS is just trying to enter a sparse market in these areas. And for those who are concerned about “fair competition”, we live in a free market system where competition is implied. I believe USPS has an amazing idea that will help the public, especially those undeserved by banks.

4/16/2014
Irving/ Texas
Dania Vanessa
Bradley/ Nimitz
Congress should most definitely offer check-cashing and debit card services. A main reason for this, is that times have changed and the world has become more dependent on technology than on paper and pencil. Even though this is true, people still need the basic services that the Postal Service offers, but this alone can not sustain the program. This is why offering other services like check-cashing and debit-card is not just beneficial to them but to individuals that are being taking advantage of by banks. If the Postal Service and banks are being regulated on the same playing field, I do not see a problem as to why the Postal Service could not offer the same services.

4/16/2014
Irving TX
Carmen
Bradley/Nimitz
I believe congress should allow the Postal Service to offer a check-chasing, and debi card services. Which will benifit the people who live fat from their banks, not only that but if the Post Office isn't having much luck with the income they're receiving. so with a feature like this, it'll truly benifit the income brought in as stated 8.9 million with such a feature. I personally don't think it would bring any competition to private businesses, that being said, I still believe they should test out such a big idea as such. But other than that I think it'd be a great idea, and benifit Americans and the postal office in the long run.

4/16/2014
Irving/TX
Vivian
Bradley/Nimitz
Congress should let the Postal Service offer check-cashing and debit-card services for those who do not have their own bank account or cash their checks to different businesses. This service may become a competition for other banks and businesses but it would give the Postal Service a possible decrease their next net loss. The Postal Service cashing-in checks for those who cannot hold a bank account would be a benefit for the them since they would not charge as much as other checking-cashing business. Helping those who cannot provide a bank account for themselves is something that Americans can't avoid. There has to be other options for workers to get their checks cashed. Having the U.S. Postal Service offer these services to workers would be efficient since you can find a postal office anywhere around your city.

4/15/2014
Irving/Texas
Kelsea
Bradley/Nimitz HS
This topic is interesting. I’d like to see just how much aid the U.S. Postal Service would provide to those on the lower rung of the economic ladder. I believe that by offering this service to Americans, the postal service can have a “coming of age” period that has been long overdue. The numbers are there. To face the facts here, the postal service is outdated and quickly dying as it is. But there is an advantage in their quantities: location. The vast quantities of a dying breed can be used to the advantage of reviving the postal service by renovating so to speak. However banks’ concerns are plausible. I don’t think that the postal service would exactly be much of a competition; maybe the two will eventually merge all together in the future when postal services become completely obsolete. This could be the dawn of a new collaboration and friendship between the two current services. I think that Congress should allow the Postal Service to offer check cashing services, but not so much debit card services. I think that by abusing the power to handle debit card services would be overstepping the boundaries of banks. This could be one step towards finding a solution to the main concern of helping the less fortunate to have adequate resources to live out their lives just as the more fortunate would.

4/15/2014
Irving/Texas
Adam
Bradley/Nimitz
Congress should allow the Postal services to offer check-cashing and debit-card services. It will benefit both the undeserved individuals and and benefit the postal offices by generating more income, because its a struggle as it is now. These solutions both benefit the American people and helps the postal offices business wise. The report that was made says the Postal Service could earn $8.9 a year if they extend to these areas. But, before any action is taken though, Congress should look over the game plan and look over the pros and cons before anything is done.

4/14/2014
Irving/ TX
Kayla
Helen Bradley/ Nimitz High School
Congress should let the Postal Service offer check-cashing and debit-card services. By allowing the Postal Services to provide this service, it would help the people with banks far from their home and those who are not fortunate enough to have a bank account because of money issues. I do not think that there would be a lot of competition or any at all. The Postal Offices will help the ones that do not have a bank and they are going to be very limited. Yes, helping under served individuals is important. We are providing opportunities to the less fortunate and helping not only the people but the Postal Offices with their economic issues.

4/13/2014
Irving/TX
Sarah L
Bradley/Nimitz High School
Congress should absolutely allow the Postal Service to offer check-cashing and debit-card services. Post Offices can be available for those who are not lucky enough to have a bank near their homes. Besides, the Postal Service needs to have a better source of income - it is struggling enough as it is. I do not believe the Postal Service will make enough to truly compete with those in the business. This is a great solution for the Postal Service to make ends meet again, and serve those in need. It is important for America to show it cares for underserved individuals. We are all a part of one country full of opportunity, after all.

4/11/2014
Irving/TX
Sarah V
Bradley/Nimitz
The U.S. Postal Service should conduct more research before they decide to get in the check-cashing business. Though the idea itself sounds like it may benefit those who do not have easy access to a bank or check-cashing service, the government should determine how many people will benefit from this to back up its claim that the service will improve the lives of the poor. Having such a service at the USPS would still be fair competition for private businesses because it is an optional service that citizens can choose to use. This could lessen the burden underserved individuals which is very important to our nation, so the government should consider all aspects of the service before they add it on to the USPS.

4/11/2014
Irving/Texas
Milton
Bradley/Nimitz
Well, they should test out the hypothesis first and see if it really works or not. Then if the hypothesis is not rejected then Congress should let the Postal Service offer check-cashing and debit -card services. And a "small" organization shouldn't affect a powerful rich private business. The private businesses are just greedy and don't want to help out the undeserved individuals but the Postal Office does, and that is the most important thing in this debate.

4/10/2014
Irving/Tx
Ruth
Bradley/Nimitz
Congress should let the postal office offer check-cashing,and debit card services. The locations of the post offices themselves are convenient enough already by adding these types of services it will only make them better,and it would attract more people to start using the post office more. Not only will this help normal individuals but it will also help underserved individuals from being robbed by banks. In all this proposition does not sound bad all it needs is a little more thought behind it,and some regulations so it can compete fairly with private businesses.

4/8/2014
Irving/Texas
Vanessa Garcia
Bradley/Nimitz High School
I believe the U.S post office should be allowed to cash checks. It is unfair that the post office works so hard and still struggles financially with no sort of help. They deliver mail with little to no cost, beneficial for us but not to them. The idea of them cashing checks seems harmless and helpful to them and citizens as well. It is stated that many Americans don't have access to a near bank and these cash-check businesses are quite pricey. If the U.S postal service teams up with banks it would be extremely beneficial to both citizens and the postal office itself.

4/8/2014
Irving/Texas
Kimberrly
Bradley/Nimitz
The postal Service’s new banking plan sounds like a good idea, but before it is put into place it should be tested not just statistically analyzed. The underprivileged towns do have a right not to be robbed by banks, and since the Postal Service is already in place in many of these small towns it makes sense to allow the people to use the services for banking. Before any Postal office puts a bank sign outside their door congress should put some serious thought into the act. Congress needs to make sure that they will not be losing money from this endeavor, other than those items the plan sounds good.

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