JPMorgan Chase said it held preliminary discussions with the U.S. Postal Service about leasing spaces in post offices for its ATMs several months ago, but has no imminent plans to move forward, a spokesperson told Banking Dive on Wednesday.
"We had very preliminary conversations with the U.S. Postal Service several months ago about what it might look like to lease a small number of spaces to place ATMs to better serve some historically underserved communities," JPMorgan Chase spokesperson Trish Wexler said. "These were very preliminary conversations — there is no agreement in place and no imminent plans to move forward." Wexler declined to share more detail on when the talks took place, only that they occurred "pre-COVID."
- The Capitol Forum, citing an internal planning document and several sources, first reported Wednesday that the nation's largest bank was exploring a partnership with the U.S. Postal Service.
The Capitol Forum's report regarding JPMorgan's potential U.S. Postal Service tie-up was quickly met with pushback from the National Association of Federally-Insured Credit Unions (NAFCU).
"Allowing Wall Street mega banks free [rein] to solicit customers from community post offices would amount to nothing more than a power grab aimed at bolstering profits," NAFCU President and CEO Dan Berger said in a statement. "From their beginning, credit unions have stepped up to the plate to deliver financial lifelines to vulnerable communities. Policymakers should advance policies that allow not-for-profit, member-owned credit unions to serve more underserved populations."
The Independent Community Bankers of America (ICBA), which has been critical of proposals for a postal banking system in the past, however, may be more open to one operated by a private entity.
Paul Merski, ICBA group executive vice president for congressional relations and strategy, told American Banker he would not necessarily oppose an arrangement between JPMorgan and the USPS.
"The only concern I have is where you are not having a physical presence but you are basically collecting deposits from a local area, maybe a more rural area, and then moving those deposits out and using them in other parts of the country," Merski told the publication.
Whether or not a JPMorgan-U.S. Postal Service pilot materializes, the idea to place banking services inside the nation's post offices is not a novel idea. The agency ran a postal banking system from 1911 to 1967.
The idea has received renewed interest in light of the coronavirus pandemic, with supporters such as Mehrsa Baradaran, a law professor at the University of California, Irvine, advocating that a postal banking system would have aided poor and rural communities in the delivery of the coronavirus stimulus checks.
While many Americans began receiving their stimulus checks in mid-April through direct deposit, unbanked households faced a longer wait for paper checks.
"If you don't have a bank account, you could wait five weeks or five months, for some people, and then you have to go pay someone to cash it for you," Baradaran said in April.
An appropriations bill passed by the House of Representatives late last month includes an amendment to allocate $2 million for a postal banking trial program.
"With a branch in every rural and urban ZIP code and trusted by all Americans, the Postal Service must provide a financial lifeline to those in need," Rep. Bill Pascrell, D-N.J., one of the amendment's sponsors, said in a statement.