Top 4 Lessons About Payday Loans Near Me US To Learn Before You Hit 30 | Победа с Педуниверситетом

Notice: Trying to access array offset on value of type null in /srv/pobeda.altspu.ru/wp-content/plugins/wp-recall/functions/frontend.php on line 698

Table of Contents

How Postal Banking Works

Postal Banking and the Unbanked

Current Situation of Postal Banking Proposals

Frequently Asked Questions

The Bottom Line

Personal Finance Banking

What Is Postal Banking?

The availability of financial services at the post office can help a lot of Americans

By Kat Tretina

Updated April 28 2022

Reviewed by JeFreda R. Brown

Fact checked by Skylar Clarine

In postal banking, the post office in your area offers the basics of financial services, like commercial banks. Postal banking is common in much of the world and was once available in the United States. Now some advocates believe bringing it back could be an affordable solution for the nation’s huge unbanked population.

The most important takeaways

Postal banking is a common practice in other countries , but it isn’t seen in the United States for decades.

Advocates believe that returning it could help make banking services at a low cost accessible to those with low incomes Americans.

Approximately 7.1 millions American households don’t have savings or checking accounts.1

Account minimums and high fees frequently prevent customers from opening accounts.

People who are not banked rely on stores for basic financial services like check cashing or bill payments that can be costly.

The way Postal Banking Works

Through postal banking, the post office at your local location acts as a bank branch. It could, for instance, offer cash for checks processing for bill payments, and even small loans.

Today, U.S. post offices do not typically provide the services mentioned above, but they do offer postal money orders, which is a convenient option for people who must pay a bill or to transfer money securely to someone else but don’t have an account with a bank. Cashing money orders at a post office location.

Generations ago, post offices were not as limited. From 1911 until 1967 in the U.S. had a Postal Savings System, where Americans could put their money into banks that were government-backed and yielding interest. However, as commercial banks increased their rates of interest on savings accounts, demand to use the Postal Savings System declined, and the program ended in 1967.2

Postal Banking and the Unbanked

The U.S. in 2019, the most recent year in which data were available over five percent of the households (about 7.1 million in all) were unbanked, meaning that no one in the household is a member of a savings or checking account with a bank or credit union.1 For those households, the most basic banking services like cashing checks can be exorbitantly costly.

According to a study conducted in 2019 by the Federal Deposit Insurance Corp. (FDIC), most households without a bank account are poor and don’t have access to a bank or credit union for reasons that include:

High account minimums. The most often cited reason is that the household didn’t have enough funds to satisfy banks their minimum balance requirements.

Lack of trust. Many people said they didn’t believe in banks’ ability to manage their money.

Fees. Unpredictable (and frequently excessive) fees—such as fees for overdrafts or monthly account charges and withdrawal fees—block some individuals from opening or keeping accounts.3

With no access to a check or savings accounts, unbanked households use services such as check-cashing stores as well as payday loan centers to conduct financial transactions, such as cashing checks as well as paying bills for utilities. Check-cashing stores in California For instance, fees can be as high as 1.79% to 14.99 percent of the face value dependent on the nature of the check.4

Postal banking advocates claim that a postal banking system would not only permit low-income people to cash their checks at lower costs, but they would also be able to stay away from predatory lenders. Being able to go to the post office to get small loans could end their reliance on costly alternatives such as payday lenders.5

Current Situation of Postal Banking Proposals

In 2014, the postal banking industry was a hot topic due to a white paper released by the U.S. Postal Service Office of Inspector General. The paper stated that underserved households spent more than $2,400 annually on interest and fees from alternative financial sources, and postal banking could reduce that dramatically.6

The white paper started fresh discussions on options for the under-served Americans. In 2020 Sen. Kirsten Gillibrand (D-N.Y.) sponsored a bill—the Postal Banking Act—that would allow the Postal Service to provide basic financial services. Gillibrand was joined by co-sponsors senators. Bernie Sanders (I-Vt.) and Sen. Jeff Merkley (D-Ore.).7

In the month of October, 2021, The Postal Service, in partnership with the American Postal Workers Union, introduced a small-scale pilot postal banking program in four cities. A few postal offices will provide services such as cash-checking as well as bill payment as well as ATM withdrawals.

Postal Banking Act and the postal banking pilot program have faced significant opposition. Postal Banking Act and the postal banking pilot program have come under significant resistance from the Republican leadership in Congress as well as banks. It was reported that the American Bankers Association (ABA) issued a statement saying, «The American Bankers Association has long been a vocal against postal banking and has previously noted that it may be seen as a government-approved provider competing with taxpaying banks, and would pose risk that USPS is not suited to manage.»

The ABA claims that, rather as the Postal Service, the answer to the problem of those who are not banked can be found in its branches. «It’s much easier than ever before to open a bank account within this country, including Bank On-certified accounts, which are now in operation in more than 50% of U.S. bank branches, and feature low costs with no overdraft charges, robust transaction capabilities like a debit card or prepaid credit card, and bill pay online,» the ABA says.8

What is postal banking?

Postal banking refers to providing basic banking services in the local postal offices. It could be things like check cashing, bill paying and even small loans.

What is the advantage of banking via postal mail?

Advocates argue that postal banking can offer financial services to millions of Americans who are not currently banking offering them a cost-effective alternative to costly check-cashing outlets as well as payday loan providers.

What’s the argument for postal banking?

A large portion of the U.S. private banking industry believes that the U.S. Postal Service is ill-equipped to include banking in its other services , and that many banks now have low-cost programs that can better serve those who are currently not banked.

The Bottom Line

Postal banking is increasingly cited as a solution that could be beneficial to people with low incomes who don’t have access to traditional credit unions or banks. While postal banking has seen some progress in Congress in the past few years, it faces significant opposition from banks. Unless postal banking becomes widespread the majority of customers will continue to depend on banks and credit unions (or check cashing stores or payday loan purveyors) for banking services.

Leave a Comment Отменить ответ