Giving Compass' Take:

• Nonprofit Quarterly explores a new report about US Senator Kirsten Gillibrand proposing that all post offices provide basic banking services, helping those who don't have access to standard financial institutions.

• Sounds crazy? Not so, since for most of the 20th century, the USPS offered savings and deposit services to Americans. A bigger question is whether fintech and social services can play a role if this isn't a viable solution.

• Here's how financial technology could innovate the world.

In this age of electronic communications, we often take the post office for granted, but it remains a powerful institution. As the US Postal Service (USPS) website indicates, 47 percent of the world’s mail volume is handled by the USPS; the website adds that if it were a private sector company, “the Postal Service would rank 37th in the 2017 Fortune500. In the 2017 Global Fortune 500 list, we ranked 99th.” The business employs over 500,000 career employees, has annual revenues of $69.6 billion, and operates 30,825 “retail offices” nationwide.

It is this last aspect — the ubiquity of post offices across the nation — that has spurred legislation (Senate Bill 2755), introduced last week by US Senator Kirsten Gillibrand (D-NY), that would require every post office to provide basic banking services. Interestingly, the idea of post offices offering banking services is not new. From 1911 to 1967, post offices offered savings and deposit services for Americans (although not loan products). At one time, Americans held more than $3 billion in deposits through postal banking ($30 billion in inflation-adjusted 2018 dollars). Other countries, including Japan, Germany, China, and South Korea, continue to offer banking services through their postal networks.

The idea, notes Eric Levitz in New York magazine, is that “By requiring the post office to provide basic financial services, Gillibrand’s bill would significantly mitigate the economic exploitation of America’s most vulnerable people, punish predatory lenders — and increase federal revenue — all without requiring policy wonks to navigate uncharted territory, or even break a sweat.”

“This is a solution to take on payday lenders, to take on the problems that the unbanked have all across the country,” explains Gillibrand.

Read the full article about the USPS playing the role of lender by Steve Dubb at nonprofitquarterly.org.