Time, August 7, 2018: Millions of Americans can’t afford a checking account. The Post Office could fix that
Leonard Edwards, 57, doesn’t have a checking account. He can’t afford one.
Once a month, the Social Security Administration adds money to his Direct Express Card. Though it looks like a typical debit card, he isn’t allowed to deposit money to it and can’t write checks from it.
Burdened with severe osteoarthritis, the former FBI employee and ex-Marine has had two hip replacements and is on disability leave.
When he goes to pay rent and utilities, the Northwest Washington, D.C., resident has to choose between coughing up “convenience fees” to use some online payment portals or spending his hard-earned dollars on money orders. Banks charge about $5 for each one.
“That’s bread, milk and sugar,” Edwards said of the fees. It’s expensive to be poor, he lamented.
Even checking accounts can be a luxury. Chase, Wells Fargo and Bank of America all require balances of $1,500 to avoid fees on their basic accounts. There are workarounds. Customers can avoid the $7-12 per month service charges for low balances by scheduling regular direct deposit payments of hundreds of dollars, but Edwards can’t meet any of those requirements.
He’s not alone in his struggles. Nine million households — 7% of households in the United States — are unbanked, or are not served by typical financial institutions, according to a Federal Deposit Insurance Corp. survey from 2015.
Now an old idea has resurfaced that would help those households with help from an unlikely source: the post office. The government would allow anyone to open small checking and interest-bearing savings accounts administered by the U.S. Postal Service.
