tag:theconversation.com,2011:/us/topics/united-states-postal-service-usps-89566/articlesUnited States Postal Service (USPS) – The Conversation2023-06-21T11:58:58Ztag:theconversation.com,2011:article/2071582023-06-21T11:58:58Z2023-06-21T11:58:58ZBehind the scenes of the investigation: Heists Worth Billions<figure><img src="https://images.theconversation.com/files/532336/original/file-20230616-17-43c17e.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">David Maimon's cybersecurity research group noticed a flood of checks in underground markets, which opened a window into much broader criminal activity.</span> <span class="attribution"><span class="source">Collage by Kimberly Patch</span></span></figcaption></figure><p><em>Professor David Maimon is director of the Evidence-Based Cybersecurity Research Group at Georgia State University.</em></p>
<p><em>He and his group are well familiar with what happens on the dark web, which consists of websites that look like ordinary websites but can be reached only using special browsers or authorization codes and are often used to sell illegal commodities.</em></p>
<p><em>In this behind-the-story video, Maimon shows some of the hundreds of thousands of bank-related images that he and his team have collected from the dark web and text message applications, and the research these discoveries spurred them to do. That research sparked the investigative story <a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz">Heists Worth Billions</a>, which Maimon teamed up to write with The Conversation’s senior investigative editor Kurt Eichenwald. Here’s how Maimon and colleagues uncovered the crimes, and his remarks from a follow-up interview.</em></p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/O4h2eOIrzts?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p><strong>Maimon’s group was monitoring images posted on the dark web when it found the initial clues that something big was afoot.</strong></p>
<p>My group and I spend a lot of time on underground markets in which criminals sell all kinds of illicit commodities. We see a lot of counterfeit products. We see a lot of identities. And in mid-2021 we started to see a lot of checks flooding the markets. </p>
<p>Those checks led us down a path where we realized that thousands of sham bank accounts were being created to steal and launder money.</p>
<p><strong>The group’s first realization was about the volume of deposits.</strong></p>
<p>Folks were using multiple accounts simultaneously to deposit the high volume of checks. They were simply purchasing from the markets and depositing on different accounts.</p>
<p>For example, three checks would be deposited into three different bank accounts by a single criminal.</p>
<p><strong>Group members connected another clue that showed them how the criminals were getting access to multiple accounts.</strong></p>
<p>We saw numerous debit cards and realized that the criminals were using those debit cards to deposit all the checks they stole or purchased.</p>
<p><strong>Then, in June 2022, the group made a key observation.</strong></p>
<p>Criminals were posting screenshots from bank accounts with balances showing zero. </p>
<p>We realized that these screenshots of zero-balance bank accounts were advertisements – they were selling bank accounts that had zero balances.</p>
<p><strong>This led the group to an investigation.</strong></p>
<p>Over six months we tracked a single criminal, counting the number of images of credit cards and the number of screenshots of bank accounts showing zero balances that he posted. </p>
<p>We’re seeing this increasing trend from one single actor and, of course, being out there in the ecosystem, we are able to see more and more copycats: more and more folks like the individual we’re monitoring, offering their services. </p>
<p><strong>And a conclusion about what allowed this to happen.</strong></p>
<p>If a criminal opens a credit card under someone else’s name, when the person realizes something is wrong and freezes the credit card, the criminal can’t use that identity anymore.</p>
<p>But with bank accounts, it’s a different story, because the credit freeze does not affect your ability to establish a new bank account under someone else’s name.</p>
<p><strong>Maimon gives some advice on how to protect your identity.</strong></p>
<p>Make sure you freeze your credit. Make sure you purchase some kind of identity theft protection plan, which will alert you every time someone is using your identity. And simply monitor your bank account on a daily basis, monitor your credit card.</p>
<p>Freezing your credit ensures that no one can access your credit report unless you actively lift the freeze.</p>
<p><strong>He talks about what’s next for his research group.</strong></p>
<p>We’re trying to understand how all those identities are actually being used in the context of money laundering and, more specifically, sports betting.</p>
<p><strong>And he sounds the alarm.</strong></p>
<p>This is a serious problem that is largely being ignored. It’s our hope that exposing the magnitude of this will help spur action, because far too many people are losing far too much money to this type of crime.</p>
<hr>
<p></p><div style="float:right;width:205px;">
<a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz"><img alt="Graphic showing a masked criminal on a stamp and saying 'Heists worth billions'" class="ls-is-cached lazyloaded" data-src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip" src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip"></a></div>
<em>This article accompanies <strong><a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz">Heists Worth Billions</a></strong>, an investigation from The Conversation that found criminal gangs using sham bank accounts and secret online marketplaces to steal from almost anyone – and uncovered just how little being done to combat the fraud.</em><p></p>
<p>• <strong><a href="https://theconversation.com/how-to-protect-yourself-from-drop-account-fraud-tips-from-our-investigative-unit-206840">How to protect yourself from drop account fraud – tips from our investigative unit</a>.</strong></p>
<p>• <strong><a href="https://theconversation.com/announcing-the-conversations-new-investigative-unit-were-looking-for-collaborators-in-academia-207394">Announcing The Conversation’s new investigative unit</a></strong></p><img src="https://counter.theconversation.com/content/207158/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Maimon receives funding from the National Science Foundation, the Criminal Investigations and Network Analysis Center at George Mason University, and other private grants which support the Evidence Based Cybersecurity research group.</span></em></p>Professor David Maimon describes how his team investigated criminal enterprises on the dark web.David Maimon, Professor of Criminal Justice and Criminology, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2068402023-06-20T13:40:12Z2023-06-20T13:40:12ZHow to protect yourself from drop account fraud – tips from our investigative unit<figure><img src="https://images.theconversation.com/files/532280/original/file-20230615-15-z17k8.png?ixlib=rb-1.1.0&rect=11%2C187%2C2546%2C1388&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Loot stolen from the U.S. Postal Service is displayed on the dark web.</span> <span class="attribution"><span class="source">Via Evidence-Based Cybersecurity Research Group</span></span></figcaption></figure><h2>The types of crimes that use drop accounts are multiplying rapidly, but there are ways to decrease your chances of becoming a victim.</h2>
<ul>
<li>Do not mail checks from anywhere but your local post office. Not even your own mailbox is safe. <a href="https://theconversation.com/how-cybercriminals-turn-paper-checks-stolen-from-mailboxes-into-bitcoin-173796">The best option? Pay bills and send money online</a>.</li>
</ul>
<h2>Protect your identity online by following these steps</h2>
<ul>
<li>Guard your Social Security number. Never use it on medical forms - if asked, write “available upon request” - for a job interview, when applying for a grocery store reward card or when booking travel. If you believe the number has been compromised, <a href="https://faq.ssa.gov/en-us/Topic/article/KA-02220">contact the Social Security Administration to get a new one</a>.</li>
<li>Use only one credit card for online shopping, and never use a debit card.</li>
<li><a href="https://theconversation.com/choose-better-passwords-with-the-help-of-science-82361">Strengthen your online and mobile phone passwords</a>.</li>
<li>If you don’t expect to apply for a credit card or loan soon, <a href="https://www.consumerfinance.gov/ask-cfpb/what-does-it-mean-to-put-a-security-freeze-on-my-credit-report-en-1341/">freeze your credit with all three credit rating agencies</a>.</li>
<li><a href="https://theconversation.com/your-credit-report-is-a-key-part-of-your-privacy-heres-how-to-find-and-check-it-116999">Check your credit reports</a>.</li>
<li>Do not respond to preapproved credit card or loan offers delivered by mail, and, to reduce offers, consider <a href="https://www.optoutprescreen.com/">opting out of receiving these mailings</a>.</li>
<li>Shred your financial information; don’t simply throw it out.</li>
<li>Never give out personal information to anyone contacting you through unsolicited phone calls or emails. </li>
</ul>
<h2>To prevent fraud involving a tax return refund or any other tax issue</h2>
<ul>
<li>Complete and send in your tax return as early as possible, which makes it more difficult for someone to steal your refund. </li>
<li><a href="https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin">Establish an identity protection PIN with the IRS</a>, which only you and the agency will know. </li>
<li>If the IRS rejects your attempt to file your tax return, or if you receive any unusual mail from the agency such as a tax transcript you didn’t request, or it notifies you of suspicious activity, contact the agency at the number <a href="https://www.irs.gov/individuals/understanding-your-cp01c-notice">listed here</a> to report possible identity theft. </li>
<li>Pay any <a href="https://www.irs.gov/payments">taxes owed online</a>, not by check.</li>
</ul>
<h2>To prevent losses through business email compromise scams</h2>
<ul>
<li>Learn and teach employees basic email safety techniques. </li>
<li>Confirm urgent emails from supervisors or vendors demanding immediate wire transfers. In fact, urgent requests are the most suspicious.</li>
<li>Assure employees that double-checking whether these purportedly urgent emails came from the listed sender will not result in criticism or punishment. </li>
<li>Never purchase a gift card requested by a supervisor through email or text.</li>
<li>Human resources officials should never change bank accounts for direct deposit if employees ask by email or text. Always call to double-check that the request is real.</li>
</ul>
<hr>
<p></p><div style="float:right;width:205px;">
<a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz"><img alt="Graphic showing a masked criminal on a stamp and saying 'Heists worth billions'" class="ls-is-cached lazyloaded" data-src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip" src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip"></a></div>
<em>This article accompanies <strong><a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz">Heists Worth Billions</a></strong>, an investigation from The Conversation that found criminal gangs using sham bank accounts and secret online marketplaces to steal from almost anyone – and uncovered just how little being done to combat the fraud.</em><p></p>
<ul>
<li><p><strong><a href="https://theconversation.com/behind-the-scenes-of-the-investigation-heists-worth-billions-207158">Behind the scenes of the investigation</a></strong></p></li>
<li><p><strong><a href="https://theconversation.com/announcing-the-conversations-new-investigative-unit-were-looking-for-collaborators-in-academia-207394">Announcing The Conversation’s new investigative unit</a></strong></p></li>
</ul><img src="https://counter.theconversation.com/content/206840/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kurt Eichenwald does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cyber bank fraud is on the rise. Here are some important ways to protect yourself.Kurt Eichenwald, Senior Investigative Editor, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1737962022-01-05T13:47:38Z2022-01-05T13:47:38ZHow cybercriminals turn paper checks stolen from mailboxes into bitcoin<figure><img src="https://images.theconversation.com/files/439400/original/file-20220104-15-uf0yj.jpg?ixlib=rb-1.1.0&rect=78%2C47%2C3420%2C2281&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Mailboxes are increasingly becoming the scene of a crime. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/getting-the-mail-royalty-free-image/182683036">GregAIT/E+ via Getty Images</a></span></figcaption></figure><p>While <a href="https://www.nist.gov/blogs/taking-measure/cybercrime-its-worse-we-thought">cybercrime gets a lot of attention</a> from law enforcement and the media these days, I’ve been documenting a less high-tech threat emerging in recent months: a <a href="https://www.fox29.com/news/suspect-found-with-checks-credit-cards-to-be-believed-stolen-from-mail-police-say">surge in stolen checks</a>. </p>
<p>Criminals are increasingly targeting U.S. Postal Service and personal mailboxes to pilfer filled-out checks and sell them over the internet using social media platforms. The buyers then alter the payee and amount listed on the checks to rob victims’ bank accounts of thousands of dollars. While the banks themselves <a href="https://www.bai.org/banking-strategies/article-detail/the-banking-industrys-multi-billion-dollar-problem/">typically bear the financial burden</a> and reimburse targeted accounts, criminals can use the checks to steal victims’ identities, which <a href="https://www.pcmag.com/news/5-ways-identity-theft-can-ruin-your-life">can have severe consequences</a>. </p>
<p>I founded and now direct Georgia State University’s <a href="https://ebcs.gsu.edu/">Evidence Based Cybersecurity Research Group</a>, which is aimed at learning what works and what doesn’t in preventing cybercrime. For the past two years, we’ve been surveilling 60 black market communication channels on the internet to learn more about the online fraud ecosystem and gather data on it in a systematic way in order to spot trends. </p>
<p>One thing we didn’t expect to see was a surge in purloined checks. </p>
<h2>An old threat returns</h2>
<p>In general, bank check theft is a type of fraud that involves the stealing and <a href="https://sqnbankingsystems.com/blog/types-of-check-fraud/">unauthorized cashing of a check</a>. </p>
<p>It’s hardly a new phenomenon. Criminals were committing check fraud as soon as the <a href="https://sqnbankingsystems.com/blog/history-of-check-fraud/">first modern checks were cut in the 18th century in England</a> – and the authorities <a href="https://www.econstor.eu/bitstream/10419/57670/1/602139635.pdf">were already looking for ways to prevent it</a>. </p>
<p>While there’s little historical data on this type of fraud, we do know it became <a href="https://books.google.com/books?id=TzJZXIoo4tIC&pg=PA78&lpg=PA78&dq=check+theft+from+mailboxes+in+the+1990s&source=bl&ots=u7SzV2GzYx&sig=ACfU3U2c5MiFGEQLiFiUPhMq9dEKzK_h0A&hl=en&sa=X&ved=2ahUKEwjkqurEmuv0AhUWTDABHbqBCNkQ6AF6BAgvEAM#v=onepage&q=check%20theft%20from%20mailboxes%20in%20the%201990s&f=false">particularly problematic in the 1990s</a> as the internet made finding willing buyers of illicit items easier than ever. For example, financial institutions <a href="https://www.occ.gov/publications-and-resources/publications/banker-education/files/check-fraud-a-guide-to-avoiding-losses.html">estimated they lost</a> about US$1 billion to check fraud from April 1996 to September 1997. </p>
<p>But what may seem a little surprising is that its resurgence now at a time when the <a href="https://www.statista.com/statistics/1111233/payment-method-usage-transaction-volume-share-worldwide/">vast majority of transactions are conducted electronically</a> and <a href="https://www.atlantafed.org/-/media/documents/banking/consumer-payments/research-data-reports/2020/02/13/us-consumers-use-of-personal-checks-evidence-from-a-diary-survey/rdr2001.pdf%27">check use continues to wane</a>. </p>
<h2>What check fraud looks like</h2>
<p>Broadly speaking, the check scams we’ve been tracking look something like this: </p>
<p>Someone breaks into a mailbox that stores letters waiting to be sent and <a href="https://www.nbcwashington.com/news/local/a-man-put-a-check-in-the-mail-it-was-stolen-altered-and-cashed-for-1900/2892470">grabs some of them</a> in hopes they’ll contain a check that’s been filled in. Often, the crime scene where the theft occurs is the victim’s own mailbox, but it can also be one of those <a href="https://newyork.cbslocal.com/2021/12/09/teaneck-checks-stolen-from-mail">blue USPS boxes</a> you pass on the street. </p>
<p>Criminals can access those with a <a href="https://www.fox5dc.com/news/montgomery-county-residents-claim-checks-were-stolen-from-usps-mailboxes">stolen or copied mailbox key</a>, which we have seen on sale for as much as $1,000.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Three USPS mailbox keys lie on a gray surface" src="https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=870&fit=crop&dpr=1 600w, https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=870&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=870&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1093&fit=crop&dpr=1 754w, https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1093&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/437642/original/file-20211214-21-1arvsvf.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1093&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An image of USPS mailbox keys on sale.</span>
<span class="attribution"><span class="source">Screenshot from Telegram</span></span>
</figcaption>
</figure>
<p>Thieves may deposit or cash the checks themselves or sell them on to others via a marketplace of illicit items, such as fake IDs and credit cards. Prices are typically $175 for personal checks and $250 for business ones – payable in bitcoin – but always negotiable and cheaper in bulk, based on our observations and direct interactions with the sellers. </p>
<p>Buyers then use nail polish remover to erase the intended payee’s name and the amount displayed on the check, replacing those details with their own preferred payee – such as a retailer – and amount, usually a lot higher than the original check. A buyer might also simply cash the check at a location like Walmart using a fake ID. </p>
<p>In some cases we believe criminals are using the checks to steal the victim’s identity by using their name and address to manufacture fake driver’s licenses, passports and other legal documents. Upon taking over someone’s identity, a criminal may use it to submit false applications for loans and credit cards, <a href="https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud">access the victim’s bank accounts</a> and engage in other types of online fraud.</p>
<h2>Tracking black market chat rooms</h2>
<p>To better understand how cybercriminals operate, my team of graduate students began monitoring 60 online chat room channels where we knew people were trafficking in fraudulent documents. Examples of these types of channels are group chats on messaging apps like WhatsApp, ICQ and Telegram, in which users post pictures of items they wish to sell. Some of the channels we are monitoring are public, while others required an invitation, which we managed to procure.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A check sits in a bowl that was used to to remove pen ink, with other checks scattered on the table, with details blacked out." src="https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/439422/original/file-20220104-25-a77y61.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">After stealing a check, criminals use nail polish remover to remove the pen ink used to fill them out. Criminals blacked out the check account and code numbers so they can’t be used without purchase. Names and addresses have been blacked out to protect victims’ identities.</span>
<span class="attribution"><span class="source">Screenshot from Telegram</span></span>
</figcaption>
</figure>
<p>After we noticed a rise in stolen checks on sale, we began systematically gathering data from those channels about six months ago in order to track the trend. We downloaded the images, coded them and then aggregated the data so we could spot trends in what was being sold. </p>
<p>In our observations, we came across an average of 1,325 stolen checks being sold every week in October 2021, up from 634 per week in September and 409 in August. Although little historical data on this practice exists, a one-week pilot study we conducted in October 2020 places these numbers in some perspective. Back then, we observed only 158 stolen checks during that period. </p>
<p>Furthermore, these figures likely only represent a small fraction of the number of checks actually being stolen and sold. We focused on only 60 markets, when in fact there are <a href="https://ieeexplore.ieee.org/abstract/document/9378229">thousands currently active</a>. </p>
<p>In dollar amounts, we found that the face value of the checks, as written, was $11.6 million in all of October and $10.2 million in September. But again, these values likely represent a small share of the actual amount of money being stolen from victims because criminals <a href="https://www.nbcwashington.com/news/local/a-man-put-a-check-in-the-mail-it-was-stolen-altered-and-cashed-for-1900/2892470">often rewrite the checks</a> for much higher amounts. </p>
<p><iframe id="yOHe0" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/yOHe0/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Using the victims addresses, which <a href="https://www.nerdwallet.com/article/banking/understanding-the-parts-of-a-check">appeared on the left top corner of the checks</a>, and focusing on the data we collected in the month of October 2021, we found New York, Florida, Texas and California were the top sources. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A dozen filled-in checks are displayed and slightly overlapping one another, with the back of a $100 bill at the bottom. The names and addresses are blacked out to protect victims' identities." src="https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1761&fit=crop&dpr=1 600w, https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1761&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1761&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=2214&fit=crop&dpr=1 754w, https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=2214&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/439421/original/file-20220104-15-14vsyah.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=2214&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Stolen personal checks typically go for $175 – but they’re cheaper purchased in bulk.</span>
<span class="attribution"><span class="source">Screenshot from ICQ</span></span>
</figcaption>
</figure>
<h2>How to protect yourself</h2>
<p>The best advice I can give consumers who want to avoid falling victim to these schemes is to avoid mailing checks, if you can. </p>
<p>Bank checking accounts usually offer customers the option to send money electronically, whether to a friend or a company, for free. And there are many apps and other services that allow you to make digital payments from bank accounts or via credit card. While there are risks with these methods as well, in general they are a lot safer than writing a check and sending it in the mail. </p>
<p>Still, some types of businesses may require a physical check for payment, such as landlords, <a href="https://www.policygenius.com/banking/what-is-a-check/">utilities and insurance companies</a>. Moreover, as a matter of personal preference, some people – myself included – prefer to pay their bills using checks rather than other methods of payment. </p>
<p>To avoid the risk, I make sure to drop off all my letters containing checks inside my local post office. That’s generally your best bet for keeping them out of the hands of criminals and ensuring they reach their intended destination. </p>
<p>The <a href="https://www.uspis.gov/">United States Postal Inspection Service</a>, the agency responsible for preventing mail theft, also <a href="https://www.uspis.gov/tips-prevention/mail-theft">offers tips</a> to stay protected. </p>
<p>As for enforcement, the inspection service works with the police and others to crack down on mail-related crime. These efforts result in the arrest of <a href="https://www.uspis.gov/tips-prevention/mail-theft">thousands of mail and packages thieves every year</a>. However, for every arrest, there are many more criminals who go undetected. </p>
<p>[<em>Over 140,000 readers rely on The Conversation’s newsletters to understand the world.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-140ksignup">Sign up today</a>.]</p>
<p>And when we informed officials of our findings, they were also surprised by what we discovered but planned to step up monitoring of these types of black market communication channels. </p>
<p>Our research suggests much more systematic data on this type of fraud is needed in order to better understand how it works, crack down on the activity and prevent it from occurring in the first place.</p><img src="https://counter.theconversation.com/content/173796/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Maimon receives funding from the National Science Foundation, Minerva, Department of Homeland Security, and the Federal Reserve Bank. </span></em></p>A cybersecurity research group has been tracking a significant rise in the number of stolen checks being sold on sites like WhatsApp and Telegram, which often results in stolen identities.David Maimon, Associate Professor of Criminal Justice and Criminology, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1616262021-06-17T12:28:42Z2021-06-17T12:28:42ZPostal banking could provide free accounts to 21 million Americans who don’t have access to a credit union or community bank<figure><img src="https://images.theconversation.com/files/406590/original/file-20210615-3839-1tr2gm0.jpg?ixlib=rb-1.1.0&rect=0%2C98%2C4564%2C2923&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Postal Service has over 30,000 retail locations in the U.S, including off the Appalachian Trail in Caratunk, Me.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/PostalProblemsAppalachianTrail/e7a4814019a842c4884f93aedfe47faa/photo?Query=US%20post%20office%20rural&mediaType=photo&sortBy=arrivaldatetime:asc&dateRange=Anytime&totalCount=38&currentItemNo=6">AP Photo/Robert F. Bukaty</a></span></figcaption></figure><p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>About a quarter of census tracts with a post office don’t have a community bank or credit union branch, suggesting postal banking could provide a financial lifeline to the <a href="https://www.nytimes.com/2014/10/30/opinion/are-banks-too-expensive-to-use.html">millions of Americans</a> without a bank account, according to our <a href="https://poverty.umich.edu/files/2021/05/PovertySolutions-Postal-Banking-PolicyBrief.pdf">new research</a></p>
<p>To reach this conclusion, we analyzed nationwide data on post office retail locations and <a href="https://www.newamerica.org/in-depth/mapping-financial-opportunity/where-are-financial-services-located/">bank and credit union branches</a>, as well as other demographic details in those areas. We wanted to understand how prevalent U.S. Postal Service locations are in areas underserved by banks and credit unions. </p>
<p>Our research examined data from <a href="https://www.census.gov/geographies/reference-maps/2020/geo/2020pl-maps/2020-census-tract.html">U.S. census tracts</a>, which are districts created by the U.S. Census Bureau to geographically represent a neighborhood. The country has 73,057 tracts that vary in square mileage yet have a standardized average population of about 4,000 residents.</p>
<p>We found that 69% of census tracts that have a post office lack a community bank – defined as having less than $10 billion in assets – while 75% don’t have a credit union branch. And 24% have neither, affecting nearly 21 million people. </p>
<p>The results varied widely from state to state. For example, in Arizona, 44% of tracts with a post office don’t have a credit union or community bank, while in Nebraska that figure is only 4%. And we found that members of minority groups tend to be located disproportionately in areas that lack banking but do have a post office.</p>
<p><iframe id="ttA1y" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/ttA1y/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Why it matters</h2>
<p>In 2019, about <a href="https://economicinclusion.gov/downloads/2019_FDIC_Unbanked_HH_Survey_Report.pdf">7.1 million Americans lacked a bank account</a> and another <a href="https://economicinclusion.gov/downloads/2017_FDIC_Unbanked_HH_Survey_Report.pdf">24.2 million</a> are considered “underbanked,” which means they use other more expensive services like <a href="https://theconversation.com/payday-lenders-have-embraced-installment-loans-to-evade-regulations-but-they-may-be-even-worse-128182">payday lenders</a> and stores that cash checks for a fee to meet their financial needs.</p>
<p>The lack of affordable banking creates real hardships that <a href="https://theconversation.com/covid-19-exposes-why-the-postal-service-needs-to-get-back-into-the-banking-business-140895">disproportionately hurt low-income Americans and communities of color</a>. Without a bank account, people pay higher fees and interest rates, have a harder time building credit history and are less able to get mortgages and other kinds of loans. And during the pandemic, when tens of millions of people in the U.S. lost jobs and struggled to feed their families, they had to <a href="https://www.taxpolicycenter.org/publications/who-did-not-get-economic-impact-payments-mid-late-may-and-why/full">wait longer</a> to receive aid from the government for which they were eligible. </p>
<p>Some lawmakers <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3571/text">are pushing the Federal Reserve</a> to help solve these problems by partnering with credit unions, small community banks and even the U.S. Postal Service to provide free bank accounts to low-income people. </p>
<p>Our <a href="http://sites.fordschool.umich.edu/poverty2021/files/2021/05/PovertySolutions-Postal-Banking-PolicyBrief.pdf">research</a> shows that the post office may be better positioned than <a href="https://www.theclearinghouse.org/-/media/new/tch/documents/advocacy/tch_unbanked_report_may_2021.pdf">community banks</a> or credit unions to expand access to financial services. </p>
<p>The U.S. used to have a system of postal banking, <a href="https://www.washingtonpost.com/outlook/2020/07/21/postal-banking-is-making-comeback-heres-how-ensure-it-becomes-reality/">which ran in various forms from 1910 to 1967</a>, when industry pressure persuaded the federal government to end it. Elsewhere in the world, such as in the U.K. and France, postal banking remains popular and <a href="https://apwu.org/news/postal-banking-successful-around-world-could-it-work-here">serves about 1.5 billion people</a>. </p>
<h2>What still isn’t known</h2>
<p>We still don’t know some details about postal banking, such as how intended communities would benefit. However, <a href="https://nativefinance.org/news/congressional-democrats-push-for-postal-banking-pilot-program/">policymakers</a>, <a href="http://www.campaignforpostalbanking.org/">advocacy groups</a> and <a href="https://apwu.org/savepostoffice">labor unions</a> have asked Congress to appropriate $6 million to support a <a href="https://inthesetimes.com/article/postal-banking-bernie-sanders-kristen-gillibrand-congress">postal banking pilot program</a> to evaluate questions like this one.</p>
<h2>What’s next</h2>
<p>Next, we will examine how postal banking compares with other options for expanding access to financial services, such as online and mobile banking.</p>
<p>In states with <a href="https://www.greatfallstribune.com/story/news/2021/04/23/montana-ranked-worst-nation-internet-data-transmission-speeds/7320220002/">some of the nation’s worst</a> broadband internet <a href="https://broadbandnow.com/research/fcc-underestimates-unserved-by-50-percent">usage rates</a>, online banking is largely unavailable and therefore not an option for many residents. We will use data to explore whether the post office offers any comparative advantages over online banking.</p>
<p>[<em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>.]</p><img src="https://counter.theconversation.com/content/161626/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Terri Friedline does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article. Beyond her academic appointment, Friedline is a member of the Consumer Financial Protection Bureau's Academic Research Council and a member of the Progressive Talent Pipeline. </span></em></p><p class="fine-print"><em><span>Ameya Pawar receives funding from the Open Society Foundations, the Economic Security Project, the Hewlett Foundation, and the UChicago Inclusive Economy Lab. He is a former Chicago alderman and ran for the Democratic nomination for governor of Illinois.</span></em></p>About a quarter of census tracts with a post office lack a credit union or community bank, making the US Postal Service an efficient way to help more Americans get low-cost bank accounts.Terri Friedline, Associate Professor of Social Work, University of MichiganAmeya Pawar, Adjunct Lecturer at the Crown School of Social Work, Policy and Practice, University of ChicagoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1482142020-10-22T12:26:18Z2020-10-22T12:26:18ZMail delays, the election and the future of the US Postal Service: 5 questions answered<figure><img src="https://images.theconversation.com/files/364857/original/file-20201021-23-18fpg0d.jpg?ixlib=rb-1.1.0&rect=89%2C107%2C2905%2C1886&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USPS is playing a major role in this year's election.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Election2020CaliforniaBallots/3cb664c559fa4c7287b5132496b4c5b2/photo?Query=postal%20AND%20service&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=1930&currentItemNo=12">AP Photo/Damian Dovarganes</a></span></figcaption></figure><p><em>Editor’s note: The U.S. Postal Service implemented operational changes earlier this year that led to a <a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">sharp increase in delayed mail</a>, raising concerns about the election as <a href="https://apnews.com/article/record-early-votes-2020-transforms-efd6eefbd3d140bdc8909360de0bff62">record numbers of Americans</a> vote by mail this year due to the pandemic.</em></p>
<p><em>The <a href="https://www.axios.com/supreme-court-pennsylvania-mail-in-voting-cd322239-57bb-4bae-aabe-a4116e5bf6d5.html">Supreme Court’s decision</a> on Oct. 19 to allow Pennsylvania to extend the deadline for accepting mail-in ballots was the latest sign of just how important USPS could be to the outcome of the election.</em></p>
<p><em>We asked legal scholars <a href="https://scholar.google.com/citations?user=y_ViJ7oAAAAJ&hl=en&oi=ao">Jena Martin</a> and <a href="https://www.law.wvu.edu/faculty-staff/faculty-information/matthew-titolo">Matthew Titolo</a> to explain why the delays have continued and to discuss their impact on the election and efforts to solve USPS’ long-term fiscal challenges.</em> </p>
<h2>1. Why have there been so many delays?</h2>
<p>The short answer is because of the operational changes made in June by the Trump administration’s <a href="https://www.nytimes.com/article/general-louis-dejoy-postmaster.html">freshly appointed postmaster general</a>, Louis DeJoy.</p>
<p><a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">Within weeks</a> of his arrival, <a href="https://www.cnn.com/2020/08/24/politics/usps-dejoy-misleading-testimony-overtime-fact-check/index.html">DeJoy eliminated overtime</a>, <a href="https://www.forbes.com/sites/andrewsolender/2020/08/19/reports-of-dismantled-usps-sorting-machines-continue-despite-dejoy-announcing-halt/#10acba5626b9">dismantled hundreds of sorting machines</a> and <a href="https://www.washingtonpost.com/context/internal-usps-document-tells-employees-to-leave-mail-at-distribution-centers/175dd1ae-e202-4777-877c-33442338d1cc/?itid=lk_interstitial_manual_14">ordered employees to leave mail behind</a> at distribution centers to ensure they could finish their routes on time.</p>
<p>As a result, the <a href="https://www.businessinsider.com/usps-documents-show-an-8-decline-after-dejoy-joined-2020-8">share of delayed mail</a> surged in late July, according to internal documents. </p>
<p>The long answer, however, has to do with the Postal Service’s <a href="https://www.amny.com/news/new-u-s-postal-service-chief-warns-of-dire-finances-as-quarterly-loss-narrows/">dire financial situation</a>, which is why <a href="https://about.usps.com/newsroom/national-releases/2020/0818-postmaster-general-louis-dejoy-statement.htm">DeJoy said he made the changes</a> – the implementation of which he later <a href="https://federalnewsnetwork.com/agency-oversight/2020/08/usps-postpones-longstanding-operational-initiatives-until-after-election-day/">promised to postpone</a> until after the election.</p>
<p>Despite DeJoy’s pledges, the delays have persisted. About 30% of long-distance mail and 45% of local mail <a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">was delayed</a> by at least a day over the four-week period ending Oct. 12, according to The New York Times, which is tracking millions of pieces of first-class mail originating in four cities. That’s about double what was typical in 2019. </p>
<h2>2. Why is the USPS suffering financially?</h2>
<p>Unlike other federal agencies, the <a href="https://about.usps.com/who-we-are/postal-history/significant-dates.htm">modern Postal Service</a> is <a href="https://facts.usps.com/top-facts/">self-funded</a>, which means it must generate its own revenue stream to use for operations – as opposed to receiving revenue from tax dollars. The more revenue the Postal Service can generate, the more resources it can devote to upgrades, salary increases and other benefits to the agency. </p>
<p>From 1982 – when the government stopped subsidizing USPS – through 2006, <a href="https://about.usps.com/who-we-are/postal-history/pieces-of-mail-since-1789.htm">it earned a profit in all but five years</a>. It began operating at an annual loss in 2007 after <a href="https://www.congress.gov/bill/109th-congress/house-bill/6407">Congress forced it to pre-fund</a> its pension obligations – which required <a href="https://www.politifact.com/factchecks/2020/apr/15/afl-cio/widespread-facebook-post-blames-2006-law-us-postal/">setting aside about $5 billion a year</a> – an onerous obligation that is out of step with how <a href="https://federalnewsnetwork.com/agency-oversight/2020/02/house-passes-smaller-usps-reform-bill-to-eliminate-pre-funding-benefits/">other agencies and businesses</a> fund their pensions. </p>
<p><iframe id="siI7w" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/siI7w/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>This has created an <a href="https://www.nalc.org/news/nalc-updates/body/Misdiagnosis.WHTF.pdf">ongoing budget crisis</a> that has left the agency unable to devote as much money to sorely needed improvements. Nor can it keep up with the strains that have been placed on it since the pandemic began. While the volume of profitable first-class mail <a href="https://www.washingtonpost.com/business/2020/07/14/postal-service-trump-dejoy-delay-mail/">has dropped sharply</a>, the number of packages has soared as Americans have avoided shopping in physical stores and are ordering more stuff online. </p>
<p>Congress <a href="https://federalnewsnetwork.com/agency-oversight/2020/07/usps-treasury-reach-agreement-on-10b-coronavirus-pandemic-relief-loan/">included a $10 billion loan</a> for the Postal Service in its March coronavirus relief bill to help it get through the pandemic. This money should help the USPS <a href="https://federalnewsnetwork.com/agency-oversight/2020/09/dejoy-defends-usps-efforts-to-fix-broken-business-model-following-court-rulings/">operate normally until August 2021</a>. However, disputes between the U.S Treasury and USPS regarding how to spend that money were only <a href="https://home.treasury.gov/news/press-releases/sm1071">recently resolved</a>.</p>
<p>The surge of election-related mail in the past few weeks, especially in <a href="https://www.apmreports.org/story/2020/08/12/postal-delivery-scores-battleground-states-mail-voting">battleground states</a>, has caused even greater mail volume for the agency, leading to <a href="https://www.usnews.com/news/politics/articles/2020-09-24/records-mail-delivery-lags-behind-targets-as-election-nears">missed targets</a> for on-time mail delivery in those areas.</p>
<h2>3. What does this mean for the election?</h2>
<p>Until this year, the Postal Service has managed to do a lot with a little. It’s long been considered the <a href="https://www.pewresearch.org/politics/2020/04/09/public-holds-broadly-favorable-views-of-many-federal-agencies-including-cdc-and-hhs/">most trusted</a> government agency in the U.S. </p>
<p>But the delays – and concerns about how it will manage an unprecedented number of mail-in ballots for the election – are <a href="https://www.wthr.com/article/news/investigations/13-investigates/usps-campaigns-to-win-public-trust-ahead-of-election/531-5f24b714-4449-433f-9af5-69343cd443e2">eroding that trust</a> </p>
<p>The USPS <a href="https://www.forbes.com/sites/alisondurkee/2020/08/25/more-than-20-states-attorneys-general-suing-postal-service-usps-changes-despite-dejoy-reversal/#4a7ecaef4533">now faces lawsuits</a> from over 20 states and such large cities as <a href="https://ag.ny.gov/sites/default/files/doc_1_complaint_usps.pdf">San Francisco and New York</a> over the operational changes, as well as confusing <a href="https://www.cpr.org/2020/09/18/colorado-secretary-of-state-settled-lawsuit-against-postal-service-election-mailers/">election-related flyers</a> the agency sent to voters.</p>
<p>After issuing a nationwide injunction against DeJoy’s restructuring efforts in September, a federal judge <a href="https://abcnews.go.com/Politics/federal-judge-halts-postal-service-citing-voter-disenfranchisement/story?id=73094981">described them as</a> “an intentional effort on the part of the current administration to disrupt and challenge the legitimacy of upcoming local, state and federal elections.”</p>
<p>A second judge <a href="https://www.wfsb.com/news/second-judge-rules-against-usps-says-election-mail-must-be-prioritized/article_0736aca5-e0b3-52d9-8768-7037391ae8b8.html">ordered that election mail</a> be prioritized. </p>
<p>Although in August the <a href="https://apnews.com/article/2ba8699f4094310f44cb2afac958ed1c">USPS warned states</a> that it couldn’t guarantee all ballots would arrive in time for Election Day, DeJoy <a href="https://www.cbs58.com/news/postmaster-general-dejoy-promises-usps-can-handle-election-mail">has since promised</a> the agency will be able to handle the surge in mail.</p>
<h2>4. What does it mean for voters?</h2>
<p>If you’re in a state where <a href="https://www.nytimes.com/interactive/2020/08/11/us/politics/vote-by-mail-us-states.html">mail-in ballots are automatically sent</a> to all voters – such as California and Nevada – there’s a greater risk your ballot will experience delays in the mail. </p>
<p>In addition, <a href="https://www.ncsl.org/research/elections-and-campaigns/vopp-table-11-receipt-and-postmark-deadlines-for-absentee-ballots.aspx">most states require mail-in ballots</a> to arrive by Election Day. Pennsylvania voters got a little relief after the <a href="https://www.nytimes.com/2020/10/19/us/supreme-court-pennsylvania-voting.html">Supreme Court on Oct. 19 left in place</a> a ruling that lets the state count them even if they arrive up to three days late – as long as they are postmarked by Nov. 3. </p>
<p>Nonetheless, concerns about mail delays have prompted both <a href="https://www.nytimes.com/2020/10/01/us/politics/democrats-in-person-voting.html">Democrats</a> and <a href="https://www.news4jax.com/news/local/2020/10/19/local-republicans-urge-early-in-person-voting/">Republicans</a> to urge their supporters to vote in person if possible to minimize the possibility of discarded ballots that favor their candidate. </p>
<p>If you still want to vote by mail, <a href="https://www.journal-news.net/journal-news/election-officials-urge-public-to-request-absentee-ballots-early/article_2fe77385-521f-5a69-96a3-cb7630d70e1c.html">officials suggest</a> you request a ballot as soon as possible – <a href="https://time.com/5889969/how-to-vote-by-mail/">deadlines vary</a> by state. In most states, <a href="https://www.cnet.com/how-to/voting-by-mail-heres-how-to-track-your-election-ballot-like-a-fedex-package-in-every-state/">you can track</a> your ballot to make sure it’s arrived safely. </p>
<h2>5. What will happen to the USPS after the election?</h2>
<p>DeJoy made the changes as part of what <a href="https://about.usps.com/newsroom/national-releases/2020/0818-postmaster-general-louis-dejoy-statement.htm">he described as a necessary and long-overdue overhaul</a> of the agency to stop the financial bleeding. Some <a href="https://www.washingtonpost.com/politics/2020/08/13/power-up-postal-workers-democrats-worry-usps-overhaul-sets-stage-privatization/">Democrats</a>, <a href="https://theintercept.com/2020/07/29/usps-postal-service-privatization/">postal employees</a> and others have accused him of laying the groundwork for <a href="https://home.treasury.gov/system/files/136/USPS_A_Sustainable_Path_Forward_report_12-04-2018.pdf">privatizing the USPS</a>.</p>
<p><a href="https://www.govexec.com/management/2012/07/case-privatizing-postal-service/57003/">Talk</a> of <a href="https://i2i.org/wp-content/uploads/2011/06/4-2001.pdf">privatization</a> is <a href="https://www.forbes.com/sites/johntamny/2014/01/05/the-right-and-left-are-wrong-about-the-u-s-post-office-lets-not-privatize-it/#508f32a86e78">hardly new</a>. Critics of the USPS as a public agency argue that turning the agency into a private entity would increase the organization’s efficiency. </p>
<p>But the problem is this ignores the essential – and less profitable – public utility services the USPS provides. <a href="https://ssrn.com/abstract=3716504">Our own review</a> of the ramifications of privatization found that many essential services that are not profitable but enhance the public good would be lost if the Postal Service became a for-profit corporation.</p>
<p>For instance, unlike FedEx or UPS, the Postal Service has a <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-15-001_0.pdf">universal service obligation</a>. That means it is required to deliver mail and provide services to every person living in the United States, including in rural communities, even if doing so isn’t profitable. FedEx and UPS have no such requirement. </p>
<p>In fact, both FedEx and UPS <a href="https://theconversation.com/voters-arent-the-only-ones-who-dread-slow-mail-struggling-small-businesses-are-also-at-risk-from-postal-service-delays-139551">use the Postal Service’s last-mile service</a> to deliver their packages to rural customers precisely because it is not profitable for them to do so.</p>
<p>In addition, although few realize it, the Postal Service provides many benefits to the public beyond mere mail delivery, such as passport services and a program that aims to check in on elderly customers. </p>
<p>As for the USPS’ impact on American elections, if it were privatized, politicians would likely lose a key way they reach voters because their <a href="https://www.uspsoig.gov/election-and-political-mail">campaign flyers</a> and other political mail are <a href="https://pe.usps.com/cpim/ftp/pubs/pub417/pub417.pdf">currently subsidized</a> at <a href="https://pe.usps.com/businessmail101?ViewName=NonprofitPrices">reduced nonprofit rates</a>. A privatized USPS would likely significantly <a href="https://www.nytimes.com/2020/08/11/us/politics/post-office-mail-in-voting.html">raise those rates</a>, which only more established candidates may be able to afford.</p><img src="https://counter.theconversation.com/content/148214/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two legal scholars explain what’s causing the USPS mail delays, what they mean for the election and the agency’s deeper financial problems.Jena Martin, Professor of Law, West Virginia UniversityMatthew Titolo, Professor of Law, West Virginia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1437982020-08-26T14:53:58Z2020-08-26T14:53:58ZMail-in voting’s potential problems only begin at the post office – an underfunded, underprepared decentralized system could be trouble<figure><img src="https://images.theconversation.com/files/354680/original/file-20200825-22-lg3vzq.jpg?ixlib=rb-1.1.0&rect=23%2C23%2C5189%2C3478&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A massive shift to mail-in voting will be hard for many of the state and local officials who run elections.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/woman-drops-off-her-main-in-ballot-outside-the-denver-news-photo/1223643499?adppopup=true">Michael Ciaglo/Getty Images</a></span></figcaption></figure><p>While much of the recent attention on mail-in voting has focused on the U.S. Postal Service or on <a href="https://theconversation.com/research-on-voting-by-mail-says-its-safe-from-fraud-and-disease-141847">the likelihood of voter fraud</a>, there is a lesser-known, looming problem for the November elections: The burden of mail-in voting does not just fall on the Postal Service. </p>
<p>Approximately <a href="http://web.mit.edu/supportthevoter/www/files/2014/01/Amer-Voting-Exper-final-draft-01-09-14-508.pdf">8,000 local election offices</a> in the United States will have a role in carrying out the 2020 election. These offices manage almost 186,000 voting precincts and rely on state, county and local employees to run elections.</p>
<p><a href="https://theconversation.com/some-states-more-ready-for-mail-in-voting-than-others-136458">Some of these offices</a> are poised to handle mail-in voting in the midst of the COVID-19 pandemic. Others are not.</p>
<p>Recognizing this, the Center for Tech and Civic Life and The Center for Election Innovation and Research <a href="https://www.axios.com/mark-zuckerberg-priscilla-chan-election-security-a4950a93-2efd-42a6-9d7a-5fcc763f9214.html">recently announced</a> that Priscilla Chan and Mark Zuckerberg committed US$300 million to help state and local officials administer elections this November. The funds will be used for things such as voting equipment and staff recruitment, support and training.</p>
<h2>Each state sets rules</h2>
<p>To carry out an election by mail, each of these hundreds of thousands of offices and employees will need to coordinate to make sure that ballots are processed in a fair, consistent and timely manner. </p>
<p>What does this process entail? Take the example of <a href="https://dos.myflorida.com/elections/for-voters/voting/vote-by-mail/">Florida</a>. In order to vote by mail, an individual must request a ballot from one of the state’s 67 Supervisors of Elections offices. Employees in each of these offices process requests according to <a href="http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0100-0199/0102/Sections/0102.012.html">standards set by Florida law</a> and guidance from the Florida Secretary of State’s Division of Elections. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A masked poll worker outside a polling center." src="https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/354695/original/file-20200825-22-myxbb2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A poll worker in Miami Beach, Florida, sits outside a polling center during the state’s primary on Aug. 18, 2020.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/poll-worker-sits-outside-a-poling-centre-during-florida-news-photo/1228096226?adppopup=true">Chandan Khanna/AFP via Getty Images</a></span>
</figcaption>
</figure>
<p>Once a voter picks up or receives her ballot by mail, they may either mail the ballot back to the office that issued the ballot or return the ballot to a secure drop box. The office then reviews the ballot to make sure it meets legal requirements to be counted.</p>
<p>Processed ballots go to the County Canvassing Board, which meets to certify the ballots and tabulate the results. Finally, the Canvassing Board reports the results to the Florida Secretary of State, who can order a recount if necessary. </p>
<p>It is a complex process, involving multiple state agencies. And Florida’s process is not unique. Each state has its own set of rules regarding how to distribute, manage and count ballots. </p>
<h2>Decentralized election system</h2>
<p><a href="https://constitutioncenter.org/interactive-constitution/interpretation/article-i/clauses/750">The Elections Clause</a> of the United States Constitution grants states the right to regulate and administer elections. This means that, while Congress has <a href="https://www.justice.gov/crt/statutes-enforced-voting-section">passed laws</a> to expand election access and protect voting rights, the legal framework governing both federal and state elections varies state by state.</p>
<p>This results in a <a href="https://www.vanderbilt.edu/university-press/book/9780826516534">highly decentralized</a> electoral system.</p>
<p>Money is one of the most important factors influencing how state and local governments run the 2020 election.</p>
<p><a href="https://www.ncsl.org/research/elections-and-campaigns/election-costs.aspx">In some states</a>, local governments must bear the entire financial burden of election administration. In others, state governments will reimburse local authorities for certain electoral costs such as ballots or other voting equipment. </p>
<p>Regardless of who bears the financial burden of elections, the universal and most frequent complaint from those who administer elections at the state and local level is a <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1540-6210.2010.02218.x">lack of resources</a> </p>
<p>The <a href="https://www.ncsl.org/research/elections-and-campaigns/election-costs-who-pays-and-with-which-funds.aspx">true cost</a> of election administration – printing ballots, maintaining voting equipment, compensating election officials and disseminating voter information, among many other tasks – in the U.S. is unclear. <a href="https://electionlab.mit.edu/sites/default/files/2019-01/mohr_et_al_2017summary.pdf">Some estimate</a> it at US$2 billion per year.</p>
<p>Ensuring all voters have access to vote by mail is even more costly. </p>
<p>The <a href="https://www.brennancenter.org/our-work/research-reports/estimated-costs-covid-19-election-resiliency-measures">Brennan Center for Justice estimated</a> that switching to universal mail-in voting access will cost an additional $982 million to $1.4 billion. This includes additional money for ballot printing, postage costs, security, ballot processing and storage, and more staffing.</p>
<p>Not all 8,000 offices have the ability to shoulder these administrative costs. </p>
<h2>Unequal burdens</h2>
<p>Because not all states are equally prepared for mail-in voting, some states have to invest much more to ensure that they are able to process an increased volume of mail-in votes. </p>
<p>For example, five states currently use vote-by-mail as their primary means of election administration. But <a href="https://www.census.gov/content/dam/Census/library/stories/2019/04/behind-2018-united-states-midterm-election-turnout-figure-3.jpg">more than 80% of voters</a> in other states, including key battlegrounds like Pennsylvania and Virginia, cast ballots in person on Election Day in 2018. </p>
<p>Introducing more widespread mail-in voting to states like these <a href="https://fas.org/sgp/crs/misc/R46407.pdf">typically involves</a> legislative changes, new government contracts and coordination across a variety of state agencies such as local elections offices and chief elections officials, boards, or commissions and new procedures for counting votes.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Voters in voting booths in Philadelphia." src="https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/354697/original/file-20200825-14-9iq1ce.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Voters cast ballots in a primary held in Philadelphia on June 2, 2020.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/voters-cast-ballots-in-primary-elections-on-june-2-2020-in-news-photo/1216890436?adppopup=true">Jessica Kourkounis/Getty Images</a></span>
</figcaption>
</figure>
<p>The <a href="https://theconversation.com/will-the-gop-let-congress-send-money-to-states-and-cities-reeling-from-the-pandemic-4-essential-reads-on-the-economic-crisis-143934">financial implications of the COVID-19 pandemic</a> have made the switch to mail-in voting even more complicated. <a href="https://www.ncsl.org/research/fiscal-policy/coronavirus-covid-19-state-budget-updates-and-revenue-projections637208306.aspx">Decreases in state revenue</a> mean that some state and local governments cannot afford to invest in election administration. <a href="https://www.cnbc.com/2020/07/07/states-in-fiscal-crisis-cuts-to-basic-services-loom-due-to-pandemic.html">According to Brian Sigritz</a>, director of State Fiscal Studies at the National Association of State Budget Officers, “Some states are projecting revenue declines of up to 20% between now and the end of fiscal 2021.”</p>
<p>While the CARES Act did provide $400 million to help state and local authorities, <a href="https://www.eac.gov/payments-and-grants/2020-cares-act-grant-faq">states are required to match</a> 20% of the funds they receive. <a href="https://fortune.com/2020/05/05/coronavirus-stimulus-cares-act-voting-funds-state-elections/">Some states</a> simply do not have the money to do so. </p>
<p>New York state Elections Commissioner Peter Kosinski <a href="https://www.usnews.com/news/best-states/new-york/articles/2020-08-11/ny-faces-bigger-deluge-in-mail-in-voting-in-november">put it this way</a>: “More resources, more personnel, more funding, and more patience would help. It’s easy to criticize us, but it’s not easy to do our jobs.”</p>
<h2>Unequal consequences</h2>
<p>Even if mail-in voting theoretically is available across most jurisdictions, citizens likely will have different voting experiences depending upon where they live. </p>
<p>Varying administrative resources and capacity often <a href="https://scholarship.law.missouri.edu/mlr/vol84/iss4/6/">influence election administration</a>. In some places, like rural Nebraska, the office that oversees elections may contain one permanent staff person and a handful of part-time workers. In other places, like in Los Angeles, election officials manage a complex system involving longer ballots, more precincts and more employees.</p>
<p>Even in normal circumstances, election administrators <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1540-6210.2008.00924.x">rarely operate</a> under clearly defined procedural processes or have effective training. This tends to result in variation with respect to how they implement election law and interact with citizens.</p>
<p>The COVID-19 pandemic <a href="https://www.irp.wisc.edu/resource/administrative-burdens-in-the-time-of-covid-19/">has only exacerbated this problem</a>. For example, <a href="https://www.baltimoresun.com/politics/bs-md-pol-election-legal-20200604-c7seszdotzeklj6jqi5po5lpy4-story.html">in Baltimore’s mail-in primary</a> some ballots were misprinted and there were problems tabulating returns. In <a href="https://www.aclufl.org/sites/default/files/aclufl_-_vote_by_mail_-_report.pdf">Florida</a> and <a href="https://www.washingtonpost.com/politics/2020/05/21/heres-problem-with-mail-in-ballots-they-might-not-be-counted/">Georgia</a>, voters from racial and ethnic minorities are more likely to cast ballots that election administrators subsequently reject.</p>
<p>These examples have real consequences. If a state’s election administrators fail to follow uniform procedures for issuing, processing and counting ballots, then the Constitution’s guarantees of equal treatment and fundamental fairness are violated.</p>
<p>Here’s an example: Take the contested 2000 presidential election between George W. Bush and Al Gore. In that election, Florida’s election administrators used varying standards to determine whether ballots were legally cast. The <a href="https://supreme.justia.com/cases/federal/us/531/98/">Supreme Court held</a> that this variation violated the minimum requirements of the Constitution.</p>
<p>History suggests that making sudden policy changes to election administration without paying attention to the administrative burdens they create can bring implementation risks and constitutional challenges. </p>
<p>The November election is a little over two months away. Will states be able to bear the burden?</p><img src="https://counter.theconversation.com/content/143798/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jennifer L. Selin has received funding for her research on the executive branch from the Administrative Conference of the United States. In addition, she has received funding for her research on Congress from the Dirksen Congressional Center and the Center for Effective Lawmaking.</span></em></p>To carry out an election by mail, hundreds of thousands of state and local offices and employees across the US must make sure that ballots are processed in a fair, consistent and timely manner.Jennifer Selin, Kinder Institute Assistant Professor of Constitutional Democracy, University of Missouri-ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1395512020-08-24T19:46:22Z2020-08-24T19:46:22ZVoters aren’t the only ones who dread slow mail – struggling small businesses are also at risk from Postal Service delays<figure><img src="https://images.theconversation.com/files/354260/original/file-20200823-20-g88wmi.jpg?ixlib=rb-1.1.0&rect=0%2C125%2C5245%2C3458&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USPS has suffered delays in recent months.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Voting-Worries/7fcf93634189491e9637c746e0a586f1/22/0">AP Photo/J. Scott Applewhite</a></span></figcaption></figure><p><a href="https://www.bloomberg.com/news/articles/2020-08-20/thousands-of-baby-chicks-die-in-mail-in-latest-postal-imbroglio?sref=Hjm5biAW">Thousands of baby chicks</a> shipped to small poultry farmers through the U.S. Postal Service have arrived at their destinations dead in recent weeks. </p>
<p>This was just one of the disturbing results of <a href="https://www.nytimes.com/2020/08/21/us/postal-service-mail-rural.html">changes to how the Postal Service operates</a>, which have led to <a href="https://www.businessinsider.com/usps-documents-show-an-8-decline-after-dejoy-joined-2020-8">widespread delays in mail delivery</a> and <a href="https://www.washingtonpost.com/business/2020/08/19/postal-service-election-ballots/">concerns among Democrats about the USPS’s ability to delivery mail-in ballots</a> during the 2020 elections. There have also been reports of delayed <a href="https://www.cnbc.com/2020/08/19/usps-slowdown-delays-delivery-of-life-saving-meds-patients.html">lifesaving medications</a>, <a href="https://www.latimes.com/california/story/2020-08-20/usps-cutbacks-post-office-chaos">rotting meat and spoiled fruits</a>. </p>
<p><a href="https://scholar.google.com/citations?user=ciYF81EAAAAJ&hl=en&oi=ao">I have studied</a> the supply chain industry for over 15 years. One thing people outside the field don’t often recognize is the critical role the USPS plays in America’s logistics infrastructure, especially for small businesses and in rural areas, as the <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2016/RARC-WP-16-015_0.pdf">only service</a> that delivers to nearly every U.S. address, six days a week. <a href="http://digitalsupplynetwork.com/index.html">My research shows</a> how it can continue to do so.</p>
<h2>Dead critters</h2>
<p>The dead chicks show just how important the Postal Service is to small businesses and their supply chains. </p>
<p>Hatcheries typically ship the birds to farmers by USPS, the <a href="https://www.washingtonpost.com/business/2020/08/22/chicks-cockroaches-crickets-frogs-how-mail-delays-are-affecting-live-animal-trade/">only service that allows people to send live animals</a>. However, newborns can survive only 72 hours without food or water, which translates into a tight delivery window. Upon arrival at the regional destination, the cargo goes to a local mail processing facility for sorting and then aboard a delivery truck for distribution.</p>
<p><a href="https://www.forbes.com/sites/alisondurkee/2020/08/17/sorting-equipment-removed-changes-to-election-mail-all-the-postal-service-usps-changes-raising-alarm-louis-dejoy/#394ae665106f">Recent changes to operations</a> – such as reduced overtime and prohibiting extra trips, moves <a href="https://www.govexec.com/pay-benefits/2020/07/looking-cut-costs-new-usps-leader-takes-aim-overtime-and-late-trips/166917/">intended</a> to address <a href="https://www.ttnews.com/articles/usps-grapples-financial-crisis-mail-delays-continue">USPS’s severe fiscal problems</a> – have slowed down the processing and distribution of packages, leading to buildup and causing delays. The consequences are particularly grievous for live animals, such as chicks, crickets and other small critters delivered by the USPS. It also causes losses to perishable goods such as <a href="https://www.latimes.com/california/story/2020-08-20/usps-cutbacks-post-office-chaos">meat</a> and flowers. </p>
<p>But beyond organics, small businesses, pharmacies and online businesses also rely on dependable deliveries to keep their supply chains humming or to ensure consumers get orders on time.</p>
<p>In the past, it’s rarely been a problem. And USPS has a very good track record. Data from <a href="https://www.myshipmatrix.com/MSM_PVHDemo/shipmatrix.aspx">ShipMatrix</a>, a delivery analytics company, shows that the Postal Service delivered 95% of packages on time in May – before the delays began – which <a href="https://about.usps.com/what/performance/service-performance/">it has maintained for many years</a>.</p>
<p>An <a href="https://oversight.house.gov/news/press-releases/new-postal-service-documents-show-nationwide-delays-far-worse-than-postal">internal document released by House Democrats</a>, however, shows that on-time delivery dropped under 85% in July. </p>
<h2>Role in the supply chain</h2>
<p>To appreciate the importance of a reliable post office, we can look at the percentage of retailers that rely on it for package delivery. <a href="https://www.digitalcommerce360.com/sso-login/?redirect=https%3A%2F%2Fwww.digitalcommerce360.com%2Foauth%2Fauthorize%2F%3Fresponse_type%3Dcode%26client_id%3DSJZPG7spnN2c7FWSwoUd5YeKjQZhhxDahCZXJsm7%26redirect_uri%3Dhttp%3A%2F%2Fwww.top500guide.com%2Fmy-account%2Flogin%2F">Nearly 20% of the top 1,000 retailers</a> fulfill at least some of their e-commerce orders through the Postal Service. </p>
<p>The USPS is even more important for small- and medium-sized businesses because of its wide reach and affordable flat rates. For instance, <a href="https://blog.etsy.com/news/files/2020/07/Etsy-COVID-relief-letter_7.22.20.pdf">over 90% of U.S. Etsy sellers depend on</a> the USPS.</p>
<p>Delays can mean a loss of business or costly refunds. Their customers can easily find alternative sellers online, and larger retailers like Walmart and Costco can offer faster delivery alternatives free – so the ability to get products fast and reliably is vital for small retailers with narrow margins.</p>
<p>The Postal Service is particularly vital for businesses in rural or isolated regions trying to participate in the growing e-commerce economy. Unlike UPS or FedEx, the Postal Service <a href="https://about.usps.com/publications/pub100.pdf">has the infrastructure</a> to reach all corners of the country, six days a week – which is mandated by law. In fact, nearly <a href="http://proximityone.com/zip_urban_rural.htm">half of all U.S. ZIP codes represent rural areas</a>, which USPS is able to serve cost-effectively to sellers and customers.</p>
<p><a href="https://www.wsj.com/articles/u-s-mail-does-the-trick-for-fedex-ups-1407182247">UPS and FedEx themselves also rely on the USPS</a> to deliver packages the “last mile” – the term for the final stage in the delivery process – especially in rural areas, because it isn’t profitable for them to operate in regions with low population densities. This means delays at the Postal Service can have ripple effects across the delivery system.</p>
<p>Without a reliable Postal Service, small businesses may need to resort to pricier FedEx and UPS options. This means higher costs that could severely hamper their ability to operate and compete on top of the impact of the pandemic and economic lockdowns.</p>
<h2>How to stay reliable</h2>
<p>While Postmaster General Louis DeJoy said the USPS is <a href="https://www.nytimes.com/2020/08/18/us/politics/postal-service-suspends-changes.html">reversing recent changes</a> that caused the delays until after the elections, something will have to be done to deal with the Postal Service’s dire financial state. It’s <a href="https://www.gao.gov/key_issues/us_postal_service_financial_viability/issue_summary">losing billions of dollars a year</a> due to a mixture of <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2018/RARC-WP-18-004.pdf">declining snail-mail volumes</a>, a legal requirement to <a href="https://www.cnn.com/2020/08/22/business/postal-service-losses-bailout/index.html">fund pensions for 75 years</a> and other factors. <a href="https://www.washingtonpost.com/powerpost/house-poised-to-pass-bill-to-boost-us-postal-service-amid-trump-attacks/2020/08/21/c9196fa8-e3c6-11ea-8181-606e603bb1c4_story.html">Political gridlock</a> means a bailout is unlikely. </p>
<p>In my view, DeJoy’s changes were overly drastic in a too-short time, but I believe some cost-cutting over a longer period of time will be necessary to <a href="https://www.gao.gov/key_issues/us_postal_service_financial_viability/issue_summary#:%7E:text=Poor%20financial%20situation%3A%20USPS's%20overall,billion%20in%20fiscal%20year%202018.&text=Insufficient%20cost%20savings%3A%20The%20savings,have%20dwindled%20in%20recent%20years">repair its balance sheet</a>. </p>
<p>But that doesn’t mean the USPS can’t continue to play its critical role. <a href="http://digitalsupplynetwork.com/index.html">My own research on supply chains</a> suggests that the USPS can both address its budget shortfalls and remain the only genuinely nationwide provider of low-cost, last-mile delivery for small businesses and isolated regions. The Postal Service is still operating with older, pre-digital technologies, and <a href="https://www.uspsoig.gov/tags/modernizing">urgent upgrades</a> to its delivery and last-mile systems – such as utilizing artificial intelligence to improve delivery routing and facility management – are necessary to ensure it can compete effectively against as well as cooperate with rivals like UPS, FedEx and even Amazon in the growing e-commerce economy. This would help reverse its recent declines in revenue. </p>
<p>However, if the focus is merely on cutting costs without modernization, small businesses and rural America will have to prepare for a future in which they might not be able to rely on USPS as <a href="https://postalmuseum.si.edu/node/2134">they have for 245 years</a>.</p><img src="https://counter.theconversation.com/content/139551/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ednilson Bernardes does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Postal Service plays a critical role in the supply chains of small businesses and in keeping rural America connected. There’s no reason it can’t continue to do so despite its financial woes.Ednilson Bernardes, Professor of Supply Chain Management, West Virginia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1446632020-08-18T04:51:27Z2020-08-18T04:51:27ZExplainer: what is the controversy around the US postal service and how might it affect the election?<figure><img src="https://images.theconversation.com/files/353323/original/file-20200818-24-12yg2m8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">AAP/EPA/CJ Gunther</span></span></figcaption></figure><p>UPDATE: US Postmaster General Louis DeJoy <a href="https://www.theguardian.com/us-news/2020/aug/18/usps-postmaster-general-louis-dejoy-election">has said</a> all changed to the postal service will be suspended until after the November 2020 election.</p>
<hr>
<p>Less than three months out from the presidential election, the United States Postal Service (USPS) has become the <a href="https://www.theguardian.com/us-news/2020/aug/17/louis-dejoy-usps-postmaster-general-election">centre of a political storm</a>. So much so that Nancy Pelosi, speaker of the House of Representatives, has recalled the house from its August recess to vote this week on legislation designed to support the service.</p>
<p>What is the issue, and why is it important?</p>
<p>In May, the Democrat-controlled House of Representatives <a href="https://www.cnbc.com/2020/05/15/coronavirus-updates-house-passes-3-trillion-relief-package.html">passed a $3 trillion coronavirus relief package</a>, which included relief funds for the USPS. It also included funding for expanded postal voting, which Republicans oppose because in many areas of the country, <a href="https://www.theatlantic.com/politics/archive/2020/06/trump-republicans-vote-mail-arizona-florida/612625/">more</a> registered Democrats have requested postal ballots than registered Republicans. The most powerful Republican in Congress, Senate majority leader Mitch McConnell, refused to allow a vote on the Bill.</p>
<p>The USPS has <a href="https://www.nytimes.com/2020/08/14/us/politics/usps-vote-mail.html">warned</a> that without additional support, it may not be able to meet deadlines for delivering voting ballots. This could have a big impact for November’s election because voters are expected to vote by mail in unprecedented numbers. In many states, ballots must be received by an election office by election day in order to be counted.</p>
<p>President Donald Trump has a long <a href="https://www.politico.com/story/2017/12/29/trump-postal-service-amazon-shipping-charges-319625">history</a> of attacking the USPS. In a July <a href="https://twitter.com/realDonaldTrump/status/1285540318503407622">tweet</a>, claimed postal voting “will lead to the most corrupt election in our nation’s history”, and that postal voting is a <a href="https://twitter.com/realdonaldtrump/status/1288932940337090561">threat to democracy</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1288932940337090561"}"></div></p>
<p>Trump <a href="https://www.rollcall.com/2020/08/13/trump-opposes-funding-postal-service-because-it-would-increase-vote-by-mail/">said</a> he opposed new postal funding because of his opposition to mail-in voting, which he maintains will benefit Democrats. He also claims, without evidence, that it is rife with fraud. He said:</p>
<blockquote>
<p>they want $3.5 billion for something that will turn out to be fraudulent, that’s election money basically […]</p>
</blockquote>
<p>A spokesperson for the Democratic National Committee <a href="https://www.rollcall.com/2020/08/13/trump-opposes-funding-postal-service-because-it-would-increase-vote-by-mail/">responded</a> that Trump admitted he was deliberately sabotaging the USPS to boost his reelection chances, and </p>
<blockquote>
<p>is taking money the Post Office needs and holding up coronavirus relief for millions of struggling Americans and small businesses because he wants to try to stop more voters from voting safely in a pandemic.</p>
</blockquote>
<p>Trump has repeatedly <a href="https://twitter.com/realDonaldTrump/status/802972944532209664">claimed</a>, again without any evidence, that illegal voting prevented him from winning the popular vote in the 2016 election. Vice President Mike Pence initiated a voting integrity commission, and found <a href="https://apnews.com/f5f6a73b2af546ee97816bb35e82c18d/Report:-Trump-commission-did-not-find-widespread-voter-fraud">no evidence</a> of widespread voter fraud. The non-partisan Brennan Center for Justice <a href="https://www.brennancenter.org/our-work/research-reports/resources-voter-fraud-claims">found</a> most allegations of fraud are baseless, with the <a href="https://www.brennancenter.org/our-work/research-reports/resources-voter-fraud-claims">rate</a> of voting fraud in the US being between 0.00004% and 0.0009%. </p>
<p>Even Mitch McConnell <a href="https://thehill.com/homenews/senate/512348-mcconnell-postal-service-will-be-just-fine">stated</a> he did not share the president’s concerns about voter fraud. </p>
<p>Despite his stated opposition, Trump does support postal voting in Florida, because the state has a good “<a href="https://www.independent.co.uk/news/world/americas/us-election/trump-press-conference-today-speech-mail-in-voting-florida-a9654371.html">Republican governor</a>”.</p>
<p>At the same time, his election campaign is <a href="https://edition.cnn.com/2020/08/05/politics/trump-campaign-nevada-mail-in-ballots/index.html">suing</a> the state of Nevada (with a Democratic governor) to prevent sending absentee ballots to active voters. </p>
<h2>The situation is entirely political</h2>
<p>The president has acknowledged his opposition to USPS funding support is because he wants to restrict many Americans from voting by mail. He has taken additional steps to achieve his goal.</p>
<p>In June 2020, Trump installed Republican donor Louis DeJoy as US Postmaster General. DeJoy is the <a href="https://www.npr.org/2020/05/07/851976464/new-postmaster-general-is-top-gop-fundraiser">chair</a> of the finance committee for the 2020 Republican National Convention, and his wife, Aldona Wos, has been nominated by Trump to be the next US Ambassador to Canada. In addition to donating more than $2 million to Trump since 2016, DeJoy and Wos own stock and assets worth up to <a href="https://www.usatoday.com/story/news/factcheck/2020/08/13/fact-check-postmaster-general-louis-dejoy-invested-competitors/5550480002/">$75.3 million</a> with USPS competitors.</p>
<p>In less than two months as postmaster general, DeJoy has <a href="https://www.npr.org/2020/08/11/901219097/how-are-postmaster-general-dejoys-changes-affecting-workers">banned</a> postal workers from working overtime or making extra trips to deliver mail on time, and removed or reassigned <a href="https://www.theatlantic.com/ideas/archive/2020/08/the-wreck-is-in-the-mail/615172/">23 executives</a> in order to centralise power around himself.</p>
<figure class="align-center ">
<img alt="Protestors write 'put DeJoy in DeJail' on path outside DeJoy's apartment." src="https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/353328/original/file-20200818-18-plknbt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Protestors outside the apartment of Postmaster General Louis DeJoy in Washington, DC.</span>
<span class="attribution"><span class="source">AAP/EPA/Jim Lo Scalzo</span></span>
</figcaption>
</figure>
<p>Several Democratic representatives have <a href="https://www.usatoday.com/story/news/politics/2020/08/13/us-postal-service-whats-going-post-office-what-we-know/3360565001/">urged</a> the FBI to investigate whether DeJoy’s actions are legal, given the “overwhelming evidence” he “hindered the passage of mail”.</p>
<p>The irony in all this is that after changing his official residence from New York to Florida, Trump inadvertently <a href="https://www.theguardian.com/us-news/2020/jun/03/donald-trump-vote-by-mail-fraud-florida">committed</a> voter fraud by registering to vote under an out-of-state address (that is, the White House in Washington DC), which is not his legal residence. He corrected his registration one month later.</p>
<p>And just last week, Trump <a href="https://www.politico.com/news/2020/08/13/trump-requests-mail-in-ballot-395164">requested</a> a postal ballot to vote in Florida’s primary election. </p>
<p>The president’s own actions suggests an opposition to voter fraud and postal voting unless it benefits him.</p>
<p>What happens from here? Probably nothing. If Trump wins re-election, the Democrats may impeach him again, but the Republicans in Congress have demonstrated no support for taking action against the president. There may well be court challenges but they could take time.</p>
<p>And with the election drawing closer, time is running out.</p><img src="https://counter.theconversation.com/content/144663/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bryan Cranston does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With a Republican donor at its head and a president opposed to it, the crippling of the United States Postal Service may play a significant role in this year’s election.Bryan Cranston, Academic Teacher, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1446442020-08-17T19:35:16Z2020-08-17T19:35:16ZAmid partisan fight over Postal Service’s future, its past reveals a common bond that helped stamp an identity on America<figure><img src="https://images.theconversation.com/files/353225/original/file-20200817-16-1hgvdkp.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4992%2C3323&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">USPS mailbox in downtown Danville, Pennsylvania. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/this-united-states-postal-service-mailbox-is-in-downtown-news-photo/1228064191?adppopup=true">Paul Weaver/Pacific Press/LightRocket via Getty Images</a></span></figcaption></figure><p>House representatives are set to <a href="https://www.washingtonpost.com/politics/2020/08/16/pelosi-calls-house-back-washington-block-postal-service-changes/?hpid=hp_hp-top-table-high_pelosi-749pm%3Ahomepage%2Fstory-ans">be recalled to Washington, D.C.</a>, amid an ongoing pandemic and fiercely-contested election season. The impetus for this emergency session is a foundational element of American life: the United States Postal Service.</p>
<p>Reports suggest that Trump appointees <a href="https://www.bloomberg.com/news/articles/2020-08-08/u-s-post-office-restructures-with-democrats-crying-sabotage">are trying to sabotage</a> the service to limit its capacity to process mail-in ballots before the coming November election. This has led to an outcry on behalf of the nation’s <a href="https://www.pewresearch.org/fact-tank/2020/05/14/the-state-of-the-u-s-postal-service-in-8-charts/">most popular</a> government agency.</p>
<p>Veterans who <a href="https://www.5newsonline.com/article/news/local/veterans-see-delays-in-medication-deliveries-from-usps/527-f5028064-3070-42d5-86c5-95c126a3b8ef">receive prescription drugs at home</a>, rural residents with limited local services and citizens <a href="https://www.washingtonpost.com/opinions/2020/05/24/americans-want-vote-they-want-be-able-do-it-by-mail/">afraid to vote in-person</a> during a public health crisis all understand the enduring value of the USPS. Equally important, the Postal Service delivers a common bond that has helped shape American society for more than 250 years. </p>
<p>Research for my <a href="http://cup.columbia.edu/book/lust-on-trial/9780231175227">recent book</a> on the postal inspector Anthony Comstock introduced me to the prominent role the Postal Service played in enabling Americans to conceive of themselves as a singular nation.</p>
<p>Sending a letter from Virginia to New England in 1640 was no easy task. Settlers in Southern Colonies mostly relied on the open seas to deliver their mail, and more than three times as many <a href="https://muse.jhu.edu/chapter/1724425/pdf">vessels</a> followed trading routes to Europe than to the Northern Colonies.</p>
<p>In the fall months, when crops sailed from Charleston and Virginia to New Amsterdam and Boston, letters traveled in a ship captain’s mailbag. Chance determined whether these letters reached their destination. </p>
<p>Beyond these insecure routes, settlers in early North American Colonies enjoyed precious little ability to <a href="https://www.upenn.edu/pennpress/book/14599.html">communicate</a> among themselves, which did not bode well for our nation’s future. </p>
<h2>Mail delivery takes off</h2>
<p>The ability to send overland letters evolved significantly by the end of the 18th century thanks to the expansion of “post roads,” especially between <a href="https://www.simonandschuster.com/books/The-Kings-Best-Highway/Eric-Jaffe/9781416586159">Boston and New York</a>. But mail delivery remained infrequent and unreliable.</p>
<p>It was not until Benjamin Franklin was appointed deputy postmaster for the Colonies, in 1753, that mail delivery modernization truly took off. During his tenure, Franklin instituted numerous <a href="https://babel.hathitrust.org/cgi/pt?id=uc1.$b61050&view=1up&seq=7">innovations</a> unique to America.</p>
<p>Until 1753 postmasters were not paid. Printers, nonetheless, had jockeyed for these positions to expand the circulation of their own publications and deny mail service to competitors. But in 1754 Franklin established a <a href="https://babel.hathitrust.org/cgi/pt?id=mdp.39015033569834&view=1up&seq=62">subscription model</a> that assured pay to printers and post riders. And in 1758 he insisted that all news sheets be delivered because they <a href="https://babel.hathitrust.org/cgi/pt?id=mdp.39015033569834&view=1up&seq=62">“are on many Occasions useful to Government, and advantageous to Commerce, and to the Publick.”</a></p>
<p>In doing so, Franklin contributed to an early American culture of free speech, which recognized the benefits of competing ideas and shared knowledge.</p>
<p>Together with postmaster William Hunter of Virginia, Franklin also instituted <a href="https://babel.hathitrust.org/cgi/pt?id=uc1.$b61050&view=1up&seq=12">changes</a> that vastly extended the flow of information among the Colonies. These included <a href="https://about.usps.com/who-we-are/postal-history/pmg-franklin.pdf">improved accounting methods and home delivery for the price of a penny</a>. </p>
<p>In 1763, the two men rode 1,600 miles on horseback from Virginia through New England to improve the service. They laid the groundwork for improvements in routes and timetables that led to an explosion of low-cost communications throughout the Northern Colonies. </p>
<p>In the years leading up to the American Revolution, <a href="https://oxfordre.com/americanhistory/view/10.1093/acrefore/9780199329175.001.0001/acrefore-9780199329175-e-9?mediaType=Article#acrefore-9780199329175-e-9-note-6">newspapers and pamphlets</a> flooded the Colonies, facilitating a shared outrage over British tyranny and condescension, and solidarity among the citizens of the fledgling nation.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=386&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=386&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=386&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=485&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=485&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337961/original/file-20200527-20215-1d1rayo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=485&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A wood engraving depicts a U.S. Mail wagon pulled by horses along Broadway during a snowstorm, New York, New York, circa 1886.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/wood-engraving-depicts-a-us-mail-wagon-pulled-by-horses-news-photo/158817036?adppopup=true">Stock Montage/Getty Images</a></span>
</figcaption>
</figure>
<p>The Continental Congress appointed Franklin as the nation’s first postmaster general in May 1775. Franklin, in turn, oversaw the rapid transition of the Colonial network he had helped create into the first post office of the United States. </p>
<p>After the Revolutionary War, George Washington declared that a democratic republic required an unprecedented diffusion of <a href="https://www.penguinrandomhouse.com/books/311582/how-the-post-office-created-america-by-winifred-gallagher/">“knowledge of the laws and proceedings of Government.”</a> He convinced Congress to support a sweeping expansion of postal routes that circulated mail and news with greater scope and reliability. </p>
<p>By 1800, nearly 21,000 miles of postal routes connected Americans living in disparate climates and economies – from <a href="https://bangordailynews.com/2011/11/21/news/state/four-rural-post-offices-to-be-spared-from-closure/">Sandy Point, Maine</a> to <a href="https://www.google.com/books/edition/The_Postal_Record/zOOcAAAAMAAJ?hl=en&gbpv=1&dq=united+states+postal+routes+1800&pg=PA65&printsec=frontcover">Natchez, Mississippi</a>. Just a generation later, French statesman Alexis de Tocqueville marveled at the reach of the post service, writing that there was <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674833425">“no French province in which the inhabitants knew each other as well as did the thirteen million men spread over the extent of the United States.”</a> </p>
<h2>United in ‘fellow feeling’</h2>
<p>Today there are few elements of American life that unite us. We have no national health service, which during the COVID-19 pandemic <a href="https://www.nytimes.com/2020/05/12/world/europe/coronavirus-nhs-uk.html?action=click&module=Top%20Stories&pgtype=Homepage">united</a> the United Kingdom in “fellow feeling,” as Queen Elizabeth II <a href="https://www.youtube.com/watch?v=wE4Cmr1j0tA">described recently</a>.</p>
<p>What America does have is the USPS, a <a href="https://constitutioncenter.org/blog/can-america-survive-without-the-united-states-post-office">constitutionally acknowledged</a> resource that still connects us all. Today it operates <a href="https://facts.usps.com/size-and-scope/">31,322</a> post offices, as far-flung as Pago Pago in American Samoa and Hinsdale, New Hampshire, the nation’s oldest <a href="https://www.theatlantic.com/business/archive/2016/08/postmaster/494498/">continuously operating</a> post office. With mail circulation <a href="https://www.nytimes.com/2020/05/10/us/politics/postal-service-trump-coronavirus.html">down by a third</a> since the COVID-19 outbreak and continued attacks on the service by Republicans eager to privatize, the U.S. Postal Service faces grave danger.</p>
<p>Unlike its private sector competitors, the USPS does not depend on profitability and keeps its promise to reach all Americans, no matter the cost. Half a million postal workers continue to make this equitable service possible, providing binding threads that draw us together in our American version of “fellow feeling.”</p>
<p>When congressional leaders meet to consider proposals to <a href="https://www.nytimes.com/2020/08/16/us/politics/coronavirus-postal-service-stimulus-bill.html">protect the USPS</a>, they should weigh the value of this cherished and historic service in uniting our country.</p>
<p><em>This is an updated version of a previous article that was <a href="https://theconversation.com/how-the-postal-service-helped-stamp-identity-on-america-and-continues-to-deliver-a-common-bond-today-137875">published by The Conversation</a> on June 2, 2020.</em></p><img src="https://counter.theconversation.com/content/144644/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amy Werbel does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The United States Postal Service plays a vital role in US civic life, one that helped shape American society more than 250 years ago and continues to characterize it today.Amy Werbel, Professor of the History of Art, Fashion Institute of Technology (FIT)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1408952020-07-08T16:00:39Z2020-07-08T16:00:39ZCOVID-19 exposes why the Postal Service needs to get back into the banking business<figure><img src="https://images.theconversation.com/files/346168/original/file-20200707-194405-ll7fwv.jpg?ixlib=rb-1.1.0&rect=68%2C68%2C4498%2C2971&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USPS could do more than deliver mail.</span> <span class="attribution"><span class="source">AP Photo/Matt Rourke</span></span></figcaption></figure><p>Financial services play a major role in the economic lives of most Americans, from the moment their paychecks are directly deposited into a bank account to the loan taken out to buy their first home or car. </p>
<p>Yet over 12 million people – about 6% of U.S. adults – <a href="https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-banking-and-credit.htm">cannot access these services</a> because they do not have a bank account. Economists call these individuals financially excluded or the “unbanked.” Being unbanked is <a href="https://www.innovations.harvard.edu/sites/default/files/CarrSchuetz2001_0.pdf">costly</a>, both financially and in terms of missed economic opportunities, and afflicts communities of color most.</p>
<p>The coronavirus recession exposes these costs even further. For example, the unbanked have had to <a href="http://www.louisianaweekly.com/48-9-million-unbanked-consumers-may-wait-20-weeks-for-federal-stimulus-checks/">wait much longer</a> than those with accounts to get <a href="https://www.irs.gov/coronavirus/economic-impact-payment-information-center">“economic impact” checks</a> – and some are still waiting. Prompt access to emergency lending is vital to helping poorer Americans endure the crisis. </p>
<p>As an <a href="https://wooster.edu/bios/_files/mlong-cv.pdf">economist who studies financial exclusion</a>, I believe there’s a solution to the problem, and one that the U.S. has tried before: postal banking.</p>
<h2>The costs of financial exclusion</h2>
<p>Financial exclusion is not a new problem. </p>
<p>Its <a href="https://scholarship.law.uci.edu/cgi/viewcontent.cgi?article=1387&context=ucilr">roots in the U.S.</a> can be traced back to the New Deal’s Federal Housing Administration, which limited mortgage lending to middle-income, predominantly white suburbs. The problem grew worse in the 1980s and ‘90s, when deregulation allowed banks to operate across state lines, leading to a <a href="https://www.fdic.gov/regulations/resources/cbi/report/CBSI-2.pdf">decline in the number of community banks</a>. National banks were less willing to lend in low-income neighborhoods.</p>
<p>Today, Black and Hispanic Americans are <a href="https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-banking-and-credit.htm">three times more likely</a> to be unbanked than whites. This is partly because the number of bank branches in <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/bank-branch-closures-take-greatest-toll-on-majority-black-areas-52872925">communities of color</a> and <a href="https://www.federalreserve.gov/pubs/bulletin/1997/199709lead.pdf">low-income communities</a> has fallen. Overall, the number of bank branches has <a href="https://banks.data.fdic.gov/explore/historical?displayFields=STNAME%2CTOTAL%2CBRANCHES%2CNew_Char&selectedEndDate=2018&selectedReport=CBS&selectedStartDate=1934&selectedStates=0&sortField=YEAR&sortOrder=desc">shrunk by 6% since 2012</a>. </p>
<p>While some people <a href="https://www.nytimes.com/2014/10/30/opinion/are-banks-too-expensive-to-use.html">avoid banks</a> because of the fees, being left out of the banking system has other costs. With less access to other lines of credit, the unbanked are <a href="https://evans.uw.edu/sites/default/files/public/NWAF%20AFS%20review%20FINAL.pdf">more likely</a> to use expensive alternatives such as title loans – in which a borrower uses a vehicle title as collateral – for emergency expenses. Annual interest rates on such loans can be <a href="https://www.cnbc.com/2020/03/27/americans-may-soon-have-more-loan-options-heres-what-to-know.html">as high as 300%</a>.</p>
<p>And being unbanked means it’s harder to develop a credit history. Without one, it is more difficult to get a mortgage loan – and <a href="https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf">thus much harder to buy a home</a>. </p>
<p>Black Americans in particular are more likely to <a href="https://www.urban.org/sites/default/files/publication/101160/explaining_the_black-white_homeownership_gap_2.pdf">lack credit scores</a> and are 40% less likely to be <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf">homeowners</a>. Since homeownership is one of the <a href="https://www.census.gov/library/stories/2019/08/gaps-in-wealth-americans-by-household-type.html">main sources of wealth</a> for middle-class Americans, this contributes to the <a href="https://socialequity.duke.edu/wp-content/uploads/2019/10/what-we-get-wrong.pdf">large racial wealth gap</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=417&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=417&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=417&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=523&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=523&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346154/original/file-20200707-194396-1d8y1ub.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=523&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The unbanked had to wait longer for their stimulus checks and had to find unconventional ways to cash them.</span>
<span class="attribution"><span class="source">AP Photo/Bebeto Matthews</span></span>
</figcaption>
</figure>
<h2>COVID-19: Worse for the unbanked</h2>
<p>The COVID-19 pandemic, by causing a dramatic collapse in economic activity and <a href="https://fred.stlouisfed.org/series/UNRATE">skyrocketing unemployment rates</a>, has compounded these problems. </p>
<p>Even in good times, more than <a href="https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm">10% of Americans</a> report they are unable to pay for an unexpected US$400 expense – and would struggle even more without access to credit. </p>
<p>Those without a banking account have even fewer options to get emergency cash, such as title or payday loans. Another option, which my research shows is especially true among women of color, is asking friends or family for money. Yet with unemployment rates reaching a <a href="https://www.nytimes.com/2020/06/06/business/economy/jobs-report-minorities.html">staggering 19.5% for Hispanic women and 17.5% for black women</a>, community resources will be stretched thin. </p>
<p>[<em>Get the best of The Conversation, every weekend.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklybest">Sign up for our weekly newsletter</a>.]</p>
<p>Financial exclusion also hampered the rollout of part of the <a href="https://home.treasury.gov/policy-issues/cares">coronavirus bailout</a> that promised stimulus payments of up to $3,400 per family. Americans with checking accounts received the payment within a few weeks via direct deposit, while those without one had to wait <a href="https://www.cbsnews.com/news/stimulus-checks-delays-bank-accounts-payment/">far longer</a>. As of early June, <a href="https://www.nasdaq.com/articles/what-to-do-if-youre-still-waiting-for-your-stimulus-check-2020-06-20">13 to 18 million Americans</a> who were expecting a check still had not received one.</p>
<p>This delay is more than an inconvenience for households living paycheck to paycheck. Many Americans urgently <a href="https://www.nytimes.com/2020/06/16/health/coronavirus-insurance-healthcare.html">need prescriptions</a> they can’t afford and are at risk of <a href="https://www.usatoday.com/story/money/2020/06/10/coronavirus-eviction-worries-mount-moratoriums-lifted/5286368002/">being evicted from their homes</a>.</p>
<h2>How postal banking works</h2>
<p>Conventional banks claim they cannot <a href="https://law.emory.edu/elj/content/volume-62/issue-3/articles/poor-cut-out-of-banking.html">serve the unbanked</a> because small-dollar loans and accounts with low balances aren’t profitable.</p>
<p>Postal banking, however, could serve the unbanked and do so efficiently. While there are <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-14-007_0.pdf">various</a> <a href="https://www.doi.org/10.1080/01603477.2020.1734462">ways</a> to do this, a basic postal banking system would allow every United States Postal Service branch to act as a limited-service bank, offering services like checking and saving accounts, pre-paid debit cards and small loans.</p>
<p>As a public corporation that doesn’t need to worry about rewarding investors, the USPS could offer financial services to more Americans at a lower cost than banks. USPS branches are already located in virtually every neighborhood in the U.S., and <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-14-007_0.pdf">over half</a> are in banking deserts. This existing network would reduce overhead. And the USPS is in a better position to handle a loan default because it could <a href="https://harvardlawreview.org/2014/02/its-time-for-postal-banking/">garnish tax refunds</a>, reducing the cost of collecting on unpaid loans.</p>
<p>What’s more, this would also offer a financial lifeline to the postal service, which has <a href="https://www.zerohedge.com/news/2014-08-11/us-postal-service-over-47-billion-losses-past-decade-and-counting-44-billion-capital">been losing money for over a decade</a>. The USPS predicts that offering postal banking services could provide between <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-14-007_0.pdf">$8 billion and $10 billion</a> in additional revenue a year, which would offset at least some of its <a href="https://www.govexec.com/management/2019/11/postal-service-doubles-annual-losses-88-billion/161317/">current shortfall</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=266&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=266&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=266&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=335&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=335&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346181/original/file-20200707-194413-1lcsnvw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=335&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A Postal Savings Certificate of Deposit from 1941.</span>
<span class="attribution"><span class="source">Smithsonian National Postal Museum</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>History and current practice show that postal banking is feasible. It is <a href="http://www.campaignforpostalbanking.org/know-the-facts/">already used</a> in 139 countries around the world, such as France, <a href="https://www.globalresearch.ca/saving-the-post-office-and-postal-banking-the-models-of-kiwibank-and-japan-post/28563">New Zealand</a> and Italy. </p>
<p>And in the U.S., Congress created a government-guaranteed savings scheme in 1910 to encourage people to put their money in the financial system – as <a href="https://about.usps.com/who-we-are/postal-history/postal-savings-system.pdf">opposed to their mattresses and cookie jars</a>. According to “How the Other Half Banks,” by banking law expert <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674983960">Mehrsa Baradaran</a>, the United States Postal Savings System was quite popular. As its peak, it held $3.4 billion in deposits. </p>
<p>But after World War II, conventional banks began to offer much higher interest rates on their deposits – with the same government guarantee. And banks began to open up branches in more underserved neighborhoods. The postal savings system stopped taking new deposits in 1966. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346179/original/file-20200707-18-1ej4jbh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Depositors stand in a queue at a postal savings window.</span>
<span class="attribution"><a class="source" href="https://postalmuseum.si.edu/collections/object-spotlight/postal-savings-system">Smithsonian National Postal Museum</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Reducing financial service inequality</h2>
<p>Now, a <a href="https://newrepublic.com/article/158080/dont-just-save-postal-service-reinvent-it">growing</a> <a href="https://www.atholdailynews.com/FCCPR-to-demonstrate-in-support-of-U-S-Postal-Service-funding-34750811">chorus</a> of <a href="https://altamontenterprise.com/05012020/gillibrand-pushes-postal-banking-serve-poor-and-save-post-office">voices</a> suggests the time has come to bring it back. </p>
<p>The details differ from proposal to proposal. Some proponents – <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-14-007_0.pdf">including USPS itself</a> – see postal banking as a complement to private sector banks, which would continue to offer a wider range of services. <a href="https://www.doi.org/10.1080/01603477.2020.1734462">Others</a> support a public bank that would compete directly with private banks through a financial services marketplace.</p>
<p>Banks, including <a href="https://www.newsweek.com/postal-banking-what-1438341#:%7E:text=Community%20Banks%20Voice%20Opposition%20to,than%20solving%20an%20existing%20one">small community banks</a>, have generally opposed postal banking. Yet the experience of other countries suggests that a postal bank <a href="https://www.finews.com/news/english-news/33147-postfinance-swiss-government-mortgages">can coexist</a> with a thriving financial services industry – while ensuring fewer Americans are left behind.</p><img src="https://counter.theconversation.com/content/140895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Melanie G. Long does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Millions of Americans are financially excluded from the banking system, which makes them even more vulnerable during the current crisis.Melanie G. Long, Assistant Professor of Economics, The College of WoosterLicensed as Creative Commons – attribution, no derivatives.