The Pew Charitable Trusts hosted a conference on Wednesday to examine the effectiveness of a plan put forth by the U.S. Postal Service in January to offer financial services to underserved communities.
Testifying at the hearing were representatives from the Credit Union National Association (CUNA), Consumer Bankers Association, Georgetown University and Wal-Mart.
The hearing is related to a proposal introduced in a white paper by USPS’ Office of Inspector General earlier this year that suggested the cash-strapped entity could pull in an additional $9.5 billion in annual revenue by offering financial services, including payday loans and check cashing services, to underserved communities.
CUNA’s Ryan Donovan, the senior vice president or legislative affairs, said, according to a CUNA press release, he was skeptical of the plan because credit unions are already in place to meet the needs of those communities.
Sen. Elizabeth Warren (D-Mass.) said, however, that a partnership between the postal service and credit unions could provide a pathway for millions of consumers to enter the traditional financial system.
“Over time, people who routinely use lower cost services at a local post office might be encouraged to take out a car loan, to open a checking account at a local credit union or community bank,” Warren said. “That’s a win-win—more people with access to traditional banking and more small banks with access to new customers.”
Donovan said CUNA could picture a partnership with USPS at the local level. Currently, 191 credit unions in 47 states are or have been affiliated with post offices.
“We could envision the possibility of other credit unions leasing spaces at post office to open branches, kiosks or ATMs,” Donovan said. “Beyond that, it’s hard to envision how much further such a partnership might go. We would be willing to engage the Postal Service in this conversation.”