Rep. Kaptur, Cleveland Community Leaders Focus On Postal Service Improvements
June 29, 2016
Kaptur: Postal Banking, Reverse Sorting Facility Closures
CLEVELAND – Rep. Marcy Kaptur (D-OH) last night joined a coalition of local Cleveland community leaders at a special hearing calling for improvements to the U.S. Postal Service, where she highlighted her ideas on co-locating traditional banking services in existing Cleveland post offices and a return to traditional mail delivery standards.
“In many ways this is a management challenge,” said Rep. Kaptur. “What’s needed is vision and strategic thinking.”
For example, Kaptur proposes ‘postal banking,’ or co-locating traditional banking or credit union services within existing Cleveland post offices. The postal banking services could range from paycheck cashing and bill payment to savings accounts and small dollar loans.
“At a time when banks and other institutions are abandoning inner city communities, Cleveland’s post offices present a perfect opportunity to co-locate with traditional banks or credit unions,” stated Kaptur.
Kaptur has also been active on forcing the Postal Service management to reverse its recent decisions to lower mail delivery standards, citing the closure of 83 sorting facilities, such as in Toledo, as resulting in mail delivery delays, and which actually cost more in added transportation expenses than it did in facility operations.
“That decision backfired drastically, cost the bottom line far more money than it saved,” said Kaptur. “The Postal Service now spends more to truck mail to distant sorting facilities than it would to maintain locally-based sorting facilities. We now have the worst of both worlds – higher costs and slower mail.”
Postal Banking:
More than 40% of Cleveland’s residents have no checking accounts or are “underbanked,” according to the Assets and Opportunity Local Data Center. The Center reports that 18.6% of Cleveland households have no checking or savings account, and 24.1% of households are “underbanked,” forced to use costly payday firms or currency exchange stores to cash paychecks or make consumer loans. More than 35% of Cleveland’s 389,000 residents live below the federal poverty line, according to the U.S. Census Bureau.
Nationwide, 28% of U.S. households are underserved by traditional banks, with African American (54%) and Latino (47%) households far more underserved.
Many post offices are located in ‘bank deserts.’ Fifty-nine percent of post offices are in zip codes with either zero banks (38%) or only one bank branch (21%). Cleveland’s Postal Service is geographically well-positioned to reach people with little-to-no access to retail banking services.
Restoring Mail Delivery Standards:
In January 2015, the Postal Service management revealed a national plan to lower mail delivery standards, or targets, while closing 83 regional sorting facilities, including the Toledo sorting facility in May 2015, a move that essentially ended overnight local delivery of first class mail and periodicals.
While intended to save operation costs through facility closures, the Postal Service action actually lost $66 million annually, and incurred $130 million in additional transportation costs due to the constant hauling of mail to other sorting facilities.
For example, local Toledo mail is taken by truck several times a day to three different facilities in Michigan, specifically in Pontiac, Downtown Detroit and Allen Park, and once sorted are then returned to Toledo for route delivery.
As a result of the Toledo sorting facility closure, mail intended for Toledo-area residents is noticeably delayed, prompting a growing and understandable frustration of Toledo and northwest Ohio residents.
Kaptur Postal Amendment
In early June 2016, during the House Appropriations Committee consideration of next year’s funding for Financial Services-related agencies, which includes the U.S. Postal Service, Rep. Kaptur offered an amendment to require the Postal Service to maintain and comply with service standards for 1st class mail and periodicals that were effective on July 1, 2012. That proposal would in effect require the Postal Service to re-open as many as 83 of the closed regional sorting facilities. Kaptur’s amendment passed on a bipartisan voice vote, and will likely be considered by the full Congress in July during the Financial Services funding debate before the full House.
Background:
Without any taxpayer funding, the USPS serves 150 million households and businesses each day, providing affordable, universal mail service to all.
The USPS is a trusted, accessible, and secure government agency with the world’s largest retail network -- 31,000 branches serving every urban, suburban, and rural community in the country.
The Cleveland event was the fourth of five scheduled hearings held nationwide by ‘A Grand Alliance to Save Our Public Postal Service,’ a coalition of more than 130 civil rights, faith-based environmental, senior citizen, civic and labor organizations.
Rep. Kaptur is a senior member on the House Appropriations Committee.