In 1947, more than 4 million Americans had $ 3.4 billion in savings deposits held not by a bank or credit union, but by the United States Postal Service.

It is a largely forgotten part of American banking (and postal) history that the USPS administered the postal savings system for 56 years, from 1911 to 1967. The system held a modest amount of savings for customers. at the 2% rate, and it was especially popular with immigrants who struggled to find honest and reliable banking options in their new society.

Immigrants also favored postal banking services for another reason: similar systems were often in place in their countries of origin. In fact, to date, postal services around the world provide small-scale financial services, from check cashing and savings accounts to e-commerce solutions, such as direct deposit of merchandise refunds. returned to the consumer’s postal account.

In September, the Postal Service took the first steps in restoring its place in the financial life of Americans: At four post offices on the East Coast, customers can now get paychecks or commercial checks from a value of up to $ 500 cashed for a lump sum of $ 5.95. The program, a long-running pilot project that has the backing of controversial Postmaster General Louis DeJoy and the American Postal Workers Union, will load profits onto single-use gift cards that customers can use as cards. of debt.

The idea of ​​postal banking may seem a little odd these days, especially as the service increases prices and delivery times in an attempt to reduce its deficit by nearly $ 4 billion. . But we shouldn’t let the struggles of the USPS and its grim bureaucratic reputation distract us from potentially transformative innovation or, in this case, a return to tradition. Postal banking has the potential to reorient the American financial landscape for the benefit of the most vulnerable.

A fifth of Americans are considered “unbanked” or “underbanked,” often relying on unscrupulous payday lenders because they don’t have the security week to week to even save. a little aside in a traditional account. According to a 2014 USPS report, in 2012 alone, these “alternative financial services” squeezed $ 89 billion in interest and fees from poor Americans. It is a sin and a scandal. The Postal Service’s pilot program has the promise of becoming a haven against these sharks.

The postal bank also has a bipartisan pedigree. Although it has recently been a centerpiece of Senator Bernie Sanders’ progressive platforms, I-Vt., It has also been promoted by reformist conservatives as a means of obtaining and retaining capital in local communities, rather than keeping it in the coffers of multinational conglomerates.

And finally, an expansion in basic financial services can be critical to the very survival of the USPS.

As Amazon and private shipping companies continue to assert their advantage, the Postal Service can back its own: thousands of locations in every nook and cranny of the country, along with a broad community trust.

We hope and hope that the postal banking pilot program will be seen as a success, and we look forward to the arrival of this new (and old) form of community banking in western Pennsylvania.

– Pittsburgh Post-Gazette