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Should Post Offices Revive Banking Services?

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Jackson concedes there would be challenges with introducing financial services through the Postal Service. For example, while he mainly sees the agency's many locations as an advantage, there would be an expense associated with outfitting all those locations with the infrastructure needed for distributing new products.But partnering with a financial services provider potentially could reduce the startup cost. "They don't necessarily have to build something from scratch," Jackson says. "They could white-label it."

Still, Ely is skeptical. "A lot of post offices are really busy and have long lines. My theory is as they cut back on the number of post offices and try to cut costs, the window service at the post office is going to get even worse."

But perhaps the biggest obstacle to the post office selling banking products is political. Even getting prepaid cards into its lobbies was an uphill battle. "You would think that would be a slam dunk, but nonetheless it took intense discussion and finally approval by our regulators before we were allowed to do that," Corbett says.

Corbett is hopeful that, with legislative support, the USPS can get back in the black within a few years. And then it's anyone's guess whether banking at the local post office might be a possibility, provided the financial services sector isn't quite as crowded with competitors as it now, he says.

"In five years, if the landscape is different and we're at an operating profit, nothing's off the table if it makes sense," Corbett says.

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Comments (2)
I remember when I was working with the Treasury Department's Financial Management Service on designing programs to implement the electronic payments' mandate for EFT'99, I tried to engage several senior officers of the Postal Service in the idea of playing a role as distributor point. I knew that millions of government benefit recipients still had their checks sent to General Delivery where they could be collected in person. I even researched the Postal Service's former banking charter with the OCC. No one at USPS was willing to schedule a meeting to discuss the idea. And now the System is in geometrically worse financial shape than they were in 19998. As Forrest Gump said, "Stupid is as stupid does."
Posted by jim_wells | Tuesday, August 07 2012 at 4:49PM ET
Any funds expended by the Postal "Service" to explore taking deposits will be wasted and added ultimately to whatever bailout is provided at taxpayer expense. There was a GAO report a couple years back analyzing the various unsuccessful ideas that have been pursued by USPS to broaden services beyond core postal functions, along with the time and money wasted. The service, cleanliness and attitudes at the post office are all abysmal, and the postal workers are ill-trained for anything more complicated than selling stamps, weighing and affixing.
Posted by dave_fortney | Tuesday, August 07 2012 at 7:05PM ET
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