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They pay fees and fines for financial services most of us take for granted, and they submit to interest rates that keep them trapped in debt. They are "the unbanked" - Americans operating in an alternate economy without access to basic financial tools.

https://www.bostonglobe.com/opinion/2015/11/09/unbanked-and-under-pressure/zR8e6Mo62K40aLYQS2temK/story.html

Correos, the postal industry leader in Spain, has partnered with Prepaid Financial Services (PFS), a leading European issuer and programme manager of physical and virtual prepaid card products, to launch the contactless Correos Prepago MasterCard® card in Spain. As part of the partnership, PFS provides the complete prepaid solution including BIN sponsorship, programme management, end-to-end technology solution and customer service support.

[In order to meet and exceed US Treasury regulations, FDIC requirements and consumer demand for basic banking, our Solution's core platform has been modified to "instant issue" bank accounts with debit cards printed on the spot and DOES NOT issue prepaid cards.]

As the industry leader in the transportation of documents and parcels, Correos distributes nearly 3,600 million deliveries each year, reaching 28 million homes, companies and institutions. Furthermore, Correos has over 2,400 post office branches across Spain, providing customers with complementary services and financial products such as money remittance and now prepaid MasterCard cards.

The new Correos Prepago card, which is a general spend reloadable prepaid MasterCard available in EUR, was soft launched online in July 2015 and is available to Spanish customers at www.correosprepago.es.

The cards will be available to purchase via the national network of Correos post offices soon and can be loaded via credit and debit card online or at any of the Correos branches in Spain.

Providing a simple, safe and internationally acceptedalternative payment method, without the need of being linked to a traditional bank account, the Correos Prepago MasterCard card has been designed specifically to help consumers budget effectively as only the amount loaded to the card can be spent.

The card is designed for usage by Spanish customers to pay for goods and services both online or on the high street and to withdraw cash from ATMs, wherever the MasterCard Logo is displayed.

In addition to the universal acceptance that the MasterCard brand brings, the product provides a high level of innovation by incorporating contactless technology. This will not only benefit cardholders by enabling them to make quicker and easier payments at the checkout, but Spanish traders will also benefit from reduced costs related to cash handling. According to industry sources, Spain is one of Europe's leading markets for contactless technology with over 600,000 contactless payments readers deployed and has a strong history of payments innovation.

http://www.prnewswire.com/news-releases/spanish-post-office-correos-partners-with-prepaid-financial-services-to-launch-correos-prepago-prepaid-card-for-spanish-consumers-531009701.html

Elizabeth Warren would like to change the way you bank.

The Massachusetts Senator and consumer advocate firebrand may not be running for president. But her backing of the U.S. Postal Service's plan to begin offering budget-priced banking services to U.S. savers could remake the American landscape regardless.

An Idea Whose Time Has Come?

In May, USPS admitted to losing $1.5 billion in its most recent fiscal quarter. If the losses keep up at this rate, the Post Office's budget deficit could surpass last year's $5.5 billion loss, and swell into a $6 billion annual deficit. Last month, though, the USPS Office of Inspector General refloated an idea to close the Post Office's budget gap. Simply put, the Post Office should turn itself into a bank.

Not entirely, of course. Under the Inspector General's plan, backed by Sen. Warren, USPS would still deliver mail and such. But it would also begin expanding the kinds of financial services it offers, permitting "unbanked" and "underbanked" customers to take out small loans, cash checks, pay bills, and open savings accounts -- all at their local post office. According to the Inspector General, entering this market could help USPS reap as much as $10 billion in annual revenue -- and close its budget gap with a resounding snap.

Even just expanding the financial services the Post Office already offers, by adding electronic wire transfers and ATMs to existing offerings of selling paper money orders and prepaid cards, and executing international money transfers, could raise as much as $1.1 billion in additional revenues for USPS.

An Idea Whose Time Came a Year Ago ...

USPS actually first voiced this suggestion early last year (when it was promptly and publicly taken up by Sen. Warren). Back then, Warren explained that 68 million Americans currently have no active checking accounts, yet still need the kinds of banking services associated with such accounts. To get these services, they pay through the nose.

According to Warren, banks and -- in particular -- payday loan and check cashing stores, charge unbanked customers "an average of $2,412 per household" annually for ordinary financial services. The Senator notes that "the average underserved household spends roughly 10 percent of its annual income on interest and fees -- about the same amount they spend on food."

What It Means to Them

This means that in one fell swoop, expanding financial services offerings at post offices could both solve USPS's chronic budget deficit and prevent millions of Americans from being overcharged for basic banking services.

No longer would the "unbanked" be stuck paying high monthly service fees to maintain a bank checking account with a too-low balance, or even higher costsfor small loans from a payday lender. These low-margin activities, too unprofitable for many banks to bother with them, could be offered at the post office instead. As a side benefit, these folks would then have thousands of extra dollars a year to spend on things they actually want to spend their money on, helping to grow the economy.

What It Means to You

Of course, if you already have a bank account, you may think USPS's plan is interesting, but not really relevant to you. It could become relevant, however.

In recent months, we've seen multiple stories of traditional banks closing down their physical branches to cut costs and take advantage of the cheapness of online banking. SNL Financial reports 332 bank closures across the U.S. in the first quarter of 2015. One single bank, JPMorgan Chase (JPM), says it's planning to close 300 branches over the next two years.

Assuming this trend continues, finding a physical branch of your bank at which you can cash a check or get a money order when you need it could become increasingly difficult. Knowing that the local post office can help you out, on the other hand, could turn increasingly attractive.

Motley Fool contributor Rich Smith doesn't own shares of any of the stocks mentioned above. (Nor does The Motley Fool.) Rich admits, he does most of his own banking online. But he's willing to give post office banking a try if it will help poor folks out, save the Post Office and thereby secure our Strategic National Junk Mail Reserve.

http://www.dailyfinance.com/2015/06/23/post-office-banking/

A new study by U.S. Postal Service overseers says the agency could add $1.1 billion in revenues through small expansions of its existing banking offerings, and could potentially generate ten times that if it gained legal authority to act more like a bank.

http://www.wsj.com/articles/usps-could-boost-revenue-by-expanding-banking-services-report-says-1432242814

Imagine if your post office offered basic financial services, like prepaid debit cards, check cashing or savings accounts.

That's exactly what the United States Postal Service wants to do.

And the 68 million Americans who aren't part of the traditional banking system are into the idea too. Roughly three quarters say they'd be likely to use lower-cost postal products if they were available, according to a new survey from the nonpartisan, nonprofit Pew Charitable Trusts.

For many of these households, the USPS might offer an attractive alternative to the pricey financial services they now shell out for— payday loans with 300% interest rates, check cashing services that cost $6 and more and prepaid debit cards that nickel and dime you every step of the way.

"There is a market for those who use alternative financial services or are unbanked currently," says Pew's Alex Horowitz, who led the survey.

This market includes the 8% of U.S. households that are totally cut off from the mainstream financial system (the so-called "unbanked") and another 20% of households that have a bank account but still go to pawn shops, payday lenders and the like.

The USPS Office of Inspector General first made the case for expanding into financial services this January, calling itself "well positioned" to meet the needs of underserved Americans. It didn't take long for the idea to garner attention from high-profile legislators like Sen. Elizabeth Warren, (D-Mass), who joined other lawmakers and experts at a Pew conference Wednesday to debate the merits and pitfalls.

There's consensus on the easy part: the problem. Most people agree that an astounding number of Americans live outside the mainstream financial system and this often has a negative impact on their financial lives and futures. In total, they comprise a quarter of US households and spend tens of billions on fees and interest each year. To put this in perspective, Warren likes to point out that these Americans spend as much money on financial services as they do on food, which is to say they spend $2,412 a year per household, or roughly 10% of their income.

http://www.forbes.com/sites/laurengensler/2014/07/17/yes-people-would-bank-at-the-post-office/

One of the biggest problems in banking today is the large and ever-increasing population of the unbanked — those who are not gaining the benefits of the regulated banking system and must rely on high-cost fringe lenders to do simple transactions like cash their paychecks. The Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau have listed this problem as a top agenda item.¹ After decades of unsuccessful regulatory proposals, the solution may finally be at hand. On January 27, 2014, the Office of the Inspector General of the U.S. Postal Service (USPS) released a white paper that proposed that the USPS consider offering financial services to the underbanked.² Senator Elizabeth Warren has also publicly expressed support for the idea.³ The proposal was immediately criticized by the banking industry as “the worst idea since the Edsel.”⁴ The main stated concern is that the Post Office lacks the institutional capacity to provide financial services.⁵ But anticompetitive concerns — namely that a large, well-funded competitor will cut into banks’ business* — likely play a role too, as they did in 2005 when Walmart attempted to obtain a banking charter

[*As we have noted the banks do not want the unbanked nor do they offer basic banking services. Or they would have long ago built a program for the “bank challenged”.]

http://harvardlawreview.org/2014/02/its-time-for-postal-banking

www.housingwire.com/articles/35520-cfpb-secures-107-million-in-relief-for-consumers

The Consumer Financial Protection Bureau and 13 state attorneys general obtained approximately $92 million in debt relief for about 17,000 U.S. service members and other consumers harmed by Colfax Capital Corporation and Culver Capital’s predatory lending scheme.

Would this ever happen at the USPS? We think not?

Evans Bancorp has settled a lawsuit by New York Attorney General Eric Schneiderman that accused the Buffalo-area bank of violating the federal Fair Housing Act by engaging in redlining, or the practice of denying mortgages to predominantly African-American neighborhoods. The bank was accused of creating a map that defined its "trade area," but much of Buffalo's East Side -- which is predominantly African-American -- was excluded from that area. Prosecutors argued that African-Americans were denied mortgages regardless of their credit scores and that the bank's pattern of lending did not arise from an absence of willing borrowers, as its rivals were much more generous in their lending. Part of the nearly $1 million settlement will support the development of affordable housing in Buffalo. Evans Bank also will invest $200,000 in advertising and marketing in the city's East Side.

From "Evans Bank Settles New York 'Redlining' Lawsuit"

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) announced a joint action against Hudson City Savings Bank for discriminatory redlining practices that denied residents in majority-Black-and-Hispanic neighborhoods fair access to mortgage loans. The complaint filed by the CFPB and DOJ alleges that Hudson City illegally provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania.

http://www.consumerfinance.gov/newsroom/cfpb-and-doj-order-hudson-city-savings-bank-to-pay-27-million-to-increase-mortgage-credit-access-in-communities-illegally-redlined/