Students propose postal service could 'deliver' financial services to poor

LAWRENCE — Students at The University of Kansas School of Social Welfare are calling for the delivery of safer and more affordable financial services to lower-income and or minority communities. And to do so, they are taking the term “delivery” to a whole new (or old) level: through the U.S. Postal Service.

Ashley Williamson and Rachael Eastlund recently submitted a proposal titled Greater Access via Postal Service (GAPS) for consideration to the Center for Global Policy Solutions’ (CGPS) Financial Inclusion Competition: “Shark-a-Thon: Chewing Over Innovative Ideas for an Inclusive Economy.” The USPS used to provide access to basic financial services through the 1960s, and many policymakers and advocates have argued that USPS could provide this access once again. However, while the idea isn’t new, it also has not been thoroughly evaluated to determine whether and how the USPS could serve lower-income and or minority communities. Williamson’s and Eastlund’s proposal aims to provide this evaluation.

“The U.S. Postal Service could be an incredible resource for low-income individuals and communities that lack access to mainstream banking,” Eastlund said. “There's a lot of support for the concept and very little research on its effectiveness. GAPS is a much-needed evaluation of a promising tool for financial inclusion, and I'm excited to be a part of it.”

While many mainstream banks have pulled out of lower-income and minority communities, post offices have kept their doors open. The USPS has more than 35,000 locations, and 59 percent are located in “bank deserts” containing just one bank or less. GAPS may provide a way to increase access among vulnerable populations and provide safe and affordable financial services with protections unlike those available from either the mainstream or alternative financial markets.

If GAPS is selected as a finalist, Williamson and Eastlund will present their proposal to nationally known funders, entrepreneurs and policymakers at the CGPS’s 2016 Color of Wealth Summit in Washington, D.C., on April 21. The top prize is a $10,000 planning grant that Williamson and Eastlund will use to carry out their GAPS proposal.

“GAPS has given us some valuable experience in proposal writing,” Williamson said. “The concept of postal banking has a lot of potential for financial inclusion, so no matter the outcome, we hope to continue evaluating this strategy.” 

Williamson and Eastlund are research assistants on a project called Mapping Financial Opportunity, led by Professor Terri Friedline, KU School of Social Welfare, and Professor Mat Despard, University of Michigan, with the Center on Assets, Education, and Inclusion at KU. Mapping Financial Opportunity (MFO) is supported by a generous grant from MetLife Foundation to explore community and structural explanations regarding access to basic financial services and how the array of services within communities may enable or hinder financial inclusion and health.