Elizabeth Warren: Allow Post Office to Offer Small Loans
In November, the U.S. Postal Service reported it had a $5 billion loss for Fiscal Year 2013, its seventh consecutive year with loss. At the time, Postmaster General Patrick Donahoe blamed Congress for the loss, citing an “inflexible business model.”
“We’ve achieved some excellent results for the year in terms of innovations, revenue gains, and cost reductions, but without major legislative changes we cannot overcome the limitations of our inflexible business model,” Donahoe said. “Congress is moving forward with legislation that has the potential to give us greater flexibility and put us back on a firm financial footing, and we strongly encourage that they continue moving forward.”
Sen. Elizabeth Warren (D-MA), however, supports an idea that would expand the role of the U.S. Postal Service from just mail delivery to financial services as well. In an op-ed for the Huffington Post published Saturday, Warren cited an Office of the Inspector General report pointing out that 68 million Americans have no checking or savings account and rely on non-bank financial services like payday loans and check cashing to the tune of $89 billion in 2012.
Warren sees this as an area for the Postal Service to get a foothold in order to see some have access “to affordable and fair financial services.”
“[T]he OIG explored the possibility of the USPS offering basic banking services—bill paying, check cashing, small loans—to its customers,” Warren wrote. “With post offices and postal workers already on the ground, 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.”
The senior Massachusetts senator argued for “nothing fancy, just basic bill paying, check cashing, and small dollar loans.” She says that countries that have instituted a similar system with the postal services have “seen their earnings increase dramatically.”