Is the post office your new competition? Or ally?
By now you’ve heard the news that is being floated by Elizabeth Warren, the senator from Massachusetts, law professor and consumer advocate. She is suggesting that Post Offices introduce basic financial services to help deliver services to the underserved.
Her proposal would involve partnerships with banks to displace the higher fee-based check cashing and payday lending businesses.
The banks have already weighed in on this and have given it a decidedly negative assessment.
This is a wake-up call to the credit union industry.
Currently, there are 36,000 post offices in the United States, while there are nearly 100,000 bank branches and approximately 21,000 credit union branches. Although they have a smaller footprint than the banking industry, credit unions have made it their stated objective to serve the underserved.
How then, did Ms. Warren miss the opportunity to suggest that these partnerships should be made with the credit union industry… that by its very nature has this spirit in their collective DNA?
With traffic decreasing at retail locations throughout the US and markedly within financial services, few institutions are planning branch growth strategies. Clearly we are over-branched in the United States and have been for years.
And, with the continued growth of electronic banking it means less investment in retail branches and fewer opportunities for community outreach.
Less investment means less presence and relevancy in the lives of the financially underserved.
There is no “app” for serving the underserved.
The underserved are heavy branch users. They rely on the local retailer…whether it is the local bank, check cashing facility, pawn shop, liquor store or credit union….to transact their business.
Serving the underserved means reaching out to their communities with the products and services that give them the hand up, not a hand out.
It’s a “boots on the ground” effort that means meeting the need where the people are by bringing the branch to the people.
It hasn’t been easy being in the financial industry during these last few years, and most financial institutions have just started returning to profitability. The financial industry may be far from returning to normalcy. However, we are clearly in a better place than we’ve been in a while. It’s time to rekindle the ongoing commitment to those most needy.
I believe that this post office financial center idea is a good one and the credit union community should be sitting at the table helping to author the strategy. Who better than those that have historically used their cooperative spirit and collective support to drive the costs of financial services down and the knowledge of financial service education up?
