Would you like a short-term loan with your stamps today?


Short on cash this week? Perhaps your friendly neighborhood post office could help.

That’s the idea proposed in a new Office of Inspector General report and quickly championed by U.S. Sen. Elizabeth Warren, a Massachusetts Democrat.

The inspector general for the U.S. Postal Service proposed that the nation’s infrastructure of post offices is superbly situated to help the millions of Americans known as the “underbanked.” These are mostly lower-income people who don’t use mainstream banks, perhaps because they can’t afford them, or they’ve been blackballed for transgressions such as a bounced check, or they simply don’t have access to a bank in their city neighborhood or rural community.

According to the report, the average unbanked household spends $2,412 a year — almost 10 percent of its income — on alternative financial services like check-cashing stores and payday loan companies. That’s money these families aren’t using to pay bills, shop for necessities or put into a checking account. Rather, it’s money that props up a predatory network that sucks money out of communities and continually asks for more.

Despite some consolidation, a post office branch is never too far away. So, the inspector general has proposed, what if these places offered services such as check cashing, small emergency loans, and reloadable prepaid cards? They could offer lower rates than the corner check-cashing shop or payday lender.

This is what you call a win-win situation. Lower-income persons could get closer to the kind of financial stability that comes from having a checking account. And the post office would gain a new source of revenue. As the inspector general report says, “If even 10 percent of what the underserved currently spend on interest and fees instead went to more affordable offerings from the Postal Service, it could lead to $8.9 billion in new revenue per year.”

Nice. So what’s standing in the way?

The quick-cash industry, of course, and its protectors in Congress.

As we have seen in Missouri, where attempts to cap sky-high interest rates on payday loans are repeatedly beaten back by a ton of cash from the short-term lending industry, these folks aren’t about to watch the U.S. Postal Service, of all things, horn in on their profits.

I can frame the pushback for you now: How dare an inefficient government bureaucracy, perhaps the most inefficient bureaucracy of all, even contemplate moving in on small businesses, the job-creators of the world, who have been in the trenches helping people turned away by the banks?

Well, here’s why. Those small business (most of which belong to chains, by the way) think nothing of charging their “neighbors” exorbitant rates destined to entrap them in debt. Repeat customers, in fact, are an essential element of their business model. In Missouri, the annual percentage rate of the average payday loan is more than 400 percent. The postal service is positioned to offer the same services at much fairer rates.

The inspector general’s idea isn’t new. Postal services in some other nations already offer financial services.

In an essay published on The Huffington Post, Warren vowed to pursue the idea.

“This is an issue I am going to spend a lot of time working on — and I hope my colleagues join me,” she said. “We need innovative ways to create pathways for struggling families to build economic security, and this is an idea that falls in that category.”

Good for her. It will be a heck of a fight, but worth the effort.

Barbara Shelly is a columnist for the Kansas City Star.

©2014 The Kansas City Star

Read more From Our Inbox stories from the Miami Herald

  • Trying to ‘secure’ a border is futile

    Can borders stop immigrants?

  • All Aboard offering sky miles for letters of support

    It was time to haggle.

  • The great reclining seat wars

    There’s an old Seinfeld episode where Jerry and Elaine are about to board a plane and the gate attendant tells them she can bump one of them into first class. Jerry immediately takes the offer, explaining to Elaine that he’s flown in first class before — she hasn’t — so he knows what he would be missing. Sure enough, Jerry spends the flight sipping champagne with a super-model while Elaine sits in a middle seat squeezed between two fat guys who fall asleep on her.

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category