Newspaper article THE JOURNAL RECORD

No Stamp of Approval: Bankers Dismiss Idea of Financial Services at Post Office

Newspaper article THE JOURNAL RECORD

No Stamp of Approval: Bankers Dismiss Idea of Financial Services at Post Office

Article excerpt

OKLAHOMA CITY - Financial industry leaders in Oklahoma aren't impressed with the idea of the U.S. Postal Service branching out to banklike services.

"The Postal Service has its own troubles with money," said Mark Colley, president of Tulsa Postal and Community Federal Credit Union. "Do they really think that there will be people out there who trust handing their money over to an organization that can't balance its own budget?"

The U.S. Postal Service Office of Inspector General early this year proposed the possibility of offering financial services to consumers who don't have access to affordable, mainstream alternatives. Officials said the USPS infrastructure, with 30,000 locations, is well-positioned to meet the needs of so-called unbanked or underserved Americans with payment services such as reloadable debit cards, small loans and products to encourage savings.

Report authors stopped short of cutting into the banking market, however.

"The Office of Inspector General is not suggesting that the Postal Service become a bank or openly compete with banks," according to the report. "We are suggesting that the Postal Service could greatly complement banks' offerings. The Postal Service could help financial institutions fill the gaps."

The idea is not novel - the USPS experimented with savings accounts in the 1960s. The Postal Service already offers money orders and electronic money transfers to a few Latin American countries. Like many retailers, it also sells prepaid debit cards now.

According to the Federal Deposit Insurance Corp., 8.2 percent of U.S. households lack banking services entirely, and 20 percent are underbanked. About 29 percent of households do not have a savings account, while 10 percent do not have a checking account. Officials discussing the USPS white paper said post offices could help alleviate that problem.

But some financial professionals say they already fill the niches.

"We're well-positioned to serve all strata of the population, so I'm not sure who their target market would be and exactly how they would plan to go about it," said Matt Stratton, senior vice president at Tinker Federal Credit Union. "It's not exactly their expertise. …

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