Nearly a fifth of the country doesn’t know what to make of the idea of getting basic banking services from the U.S. Postal Service (USPS), according to a new poll, but support for the idea outweighs opposition by a substantial margin among the rest of the populace.
The poll found 44 percent in favor of and 37 percent opposed to the idea put forth recently by Sen. Elizabeth Warren (D-MA) to have the USPS replace check-cashing and payday-lending businesses. The survey found 19 percent unsure of their position. That significant level of uncertainty in the YouGov/Huffington Post survey of nearly 1,000 people suggests that public opinion of the postal banking idea could still break in either direction. (While YouGov is an online polling system, it is not a haphazard one, and its methodology has been embraced as scientific by polling expert Nate Silver.)
The idea behind the proposal Warren made in early February is actually much older and comes from two seemingly disparate public policy problems. The first is payday lending itself. That predatory industry siphons more than $3 billion per year out of the country’s poorest communities by charging average annual interest rates of nearly 400 percent to people too desperate for cash to worry about the fine print. State-level crackdown efforts in the past have proven largely ineffective because the industry wields significant influence with lawmakers and because it simply changes tactics to evade the few regulations that do make it past their army of lobbyists. Federal oversight is finally coming to the industry after it had slipped through the regulatory cracks for years, and that scrutiny has caused major banks to drop their internal high-interest cash advance programs that duplicated some of the payday lending industry’s worst practices.
But with millions of poor Americans lacking access to banking services, the demand for cash-advance service isn’t going to disappear. The USPS could meet that demand while charging one tenth of the exorbitant fees and interest that poor people are faced with under the current system. In doing so, it would also bring in enough new revenue to shore up its own finances for decades to come. The USPS is often portrayed as being on the cusp of insolvency, but the only reason its books look so bad is that Congress requires the agency to fund all its pension obligations for 75 years into the future — a requirement no other company or public agency faces. Postal banking wouldn’t just crowd out predatory lenders; it could even save the Post Office.
According to the YouGov survey, the American people would like that. The USPS enjoys a 64 percent approval rating, compared to 48 percent for banks and just 18 percent for check-cashing and payday-lending storefronts. But the sample also seems not to capture the sorts of people who actually use those storefronts: just 6 percent of respondents use a check casher or payday lender more often than they use a bank or credit union, and 79 percent of the group were satisfied with the banking services options currently available to them.