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Merits of Postal Banking on Display in COVID-19 Pandemic

Nearly 60% of U.S. post offices are located in ZIP codes that have either a single bank branch or none at all.  (MelissaMN/Adobe Stock)
Nearly 60% of U.S. post offices are located in ZIP codes that have either a single bank branch or none at all. (MelissaMN/Adobe Stock)
April 8, 2020

HELENA, Mont. -- Social distancing during the coronavirus pandemic has disrupted many services of everyday life, including restricting hours at some banks. Postal workers see this as further proof that offering financial services at post offices is a good idea.

Banking already is limited in many parts of the country, especially rural areas, and nearly 60% of the country's 30,000 post offices are located in ZIP codes with one bank branch or none. Stephen DeMatteo, who leads the Campaign for Postal Banking at the American Postal Workers Union, said that's a problem for millions of Americans awaiting their coronavirus-relief stimulus checks.

"If we had a postal financial system set up in a real way in this country," he said, "that would be one way that people could be able to access money from the federal government."

Nearly one in four Americans doesn't have regular access to a bank or other financial services. People will get their $1,200 government stimulus checks through direct deposit if they've filed income-tax returns for 2018 or 2019, starting as early as this week. But it could take two months for those waiting on a check by mail.

Across the United States, postal workers are considered essential and are continuing their duties. DeMatteo said postal banking would bring in additional funds to the U.S. Postal Service.

"But we're also cognizant of the fact that we don't want to replicate some of the worst practices in the commercial banking industry right now, at the post office," he said. "So, we don't want to be ripping people off with high-interest loans; we don't want to be charging people high fees for saving or spending accounts."

DeMatteo noted that money orders and a limited wire-transfer system already run through post offices and could be expanded. He said he believes the Postal Service already has the legal authority to do this, as well as provide other services, such as offering paycheck cashing and installing ATMs, without the need for approval from Congress.

Disclosure: American Postal Workers Union contributes to our fund for reporting on Consumer Issues, Livable Wages/Working Families. If you would like to help support news in the public interest, click here.
Eric Tegethoff, Public News Service - MT