Post Office Reintroduces Banking Service
Postal Savings Scheme closed in 1967
The idea of going to a post office to cash a check can become nostalgic. After all, it was in 1967 that the Postal Service stopped providing banking services. Previously, the Postal Savings System was a powerhouse, holding billions of dollars in assets at its peak. It was the only game in town where your money was federally protected. Everything changed when the Federal Deposit Insurance Corporation (FDIC) was created in 1933 and bank deposits were guaranteed by the federal government. The demand for postal banking services eventually disappeared.
Today, most people use banks to save their money, but there are still millions of Americans who are unbanked or do not have a checking or savings account. They typically rely on expensive check cashing services or payday loans to get paid.
Among unbanked households in America, AARP found that 3.1 million were headed by someone over the age of 50. Of these, 13% are African American/Black households while 11% are Hispanic/Latino households. When you count those who use check cashers and payday lenders, there are approximately 14.2 million households aged 50 and over who do not have access to traditional financial services. Even for those with bank accounts, access to their local branches, especially in rural neighborhoods, becomes more difficult. In 2021, more than 4,000 bank branches closed, setting a record for closings in one year.
Postal banking services needed in rural areas
In small towns that only have one gas station, one restaurant, and one post office downtown, traveling a long distance to the bank is not viable. Do your banking at the east post office. Of its more than 31,000 post offices, more than 17,000 are in neighborhoods with one or no bank branches. It is these hard-to-reach households that the Postal Service is trying to reach.