Could the Post Office Make Payday Lenders Obsolete?

What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

5 Surprising Benefits of Exercising Outdoors in WinterFamily

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

17 Ways to Have More Fun for Less MoneySave

This Free Software Brings Old Laptops Back to LifeMore

30 Household Uses for Baby OilSave

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

Considering a Fixer-Upper? 15 Ways to Avoid a Money PitGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Healthful Treats for Your DogFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

20 Tips for Buying a Home in the Best Location, Location, LocationGrow

30 Awesome Things to Do in RetirementCollege

New Study Ranks the Best States in the U.S.Family

6 Overlooked Ways to Save at Chick-fil-AFamily

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

House Hunters: Beware of These 6 Mortgage MistakesBorrow

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

10 Ways to Save When Your Teen Starts DrivingFamily

The True Cost of Bad CreditCredit & Debt

You’ll Soon Pay More to Shop at CostcoSave

Marijuana Stocks Flaming Out Under TrumpFamily

21 Restaurants Offering Free Food Right NowSaving Money

It's been proposed that post offices provide financial services to those who now depend on payday lenders and check-cashing joints.

This post comes from Christine DiGangi at partner site Credit.com

In a new report, the Office of the Inspector General of the U.S. Postal Service explored the idea of having post offices provide financial services to those under-served by the nation’s banking structure. Namely, the poor.

The report notes that about 68 million American adults — more than a quarter of U.S. households — make up that under-served population.

These Americans are more likely to turn to payday loans and cash-checking services for their money needs. Those products carry high costs, and in 2012, this group spent about $89 billion in interest and fees associated with those financial offerings, meaning cash-strapped Americans pay more than others to do everyday financial tasks like getting loans or cashing checks.

The idea has at least one vocal supporter in Congress. In a Huffington Post op-ed, Sen. Elizabeth Warren, D-Mass., praised the idea, saying it would not only alleviate financial pressure on those without banking services, it would help the Postal Service overcome the financial troubles it has battled as letter volume has declined in recent years.

“The Postal Service is well-positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector,” the report said, and it outlines those ideas, describing potential payment services, savings products and credit services.

The existing postal infrastructure, combined with the limited financial services already offered at USPS locations (i.e., money orders and international money transfers), gives the concept some traction.

“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,” Warren wrote in her op-ed.

She highlighted the way such partnerships could help those living paycheck to paycheck, again touching on the double whammy of limited services and high interest rates available to non-banking Americans.

Payday loans can carry interest rates of about 300 percent, and most people can’t afford to pay them off within the original terms of the loan. Check-cashing fees may not seem like that much — a check for up to $1,000 costs $3 to cash at Walmart stores, for instance — but they add up, taking away from the limited money the consumers may have in the first place.

Warren seems fired up about the idea and said she plans to diligently explore the matter. If more affordable, accessible non-banking financial services emerge for under-served populations, it could make a huge difference for struggling families’ budgets and, consequently, their quality of life.

More on Credit.com:

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 7 Things Worth Paying More For

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,022 more deals!