Gillibrand unveils bill to offer banking services at post offices
Sen. Kirsten Gillibrand (D-N.Y.) will offer a bill to establish retail banking services at every U.S. post office, her office announced Wednesday.
Gillibrand will introduce a bill that would make the U.S. Postal Service (USPS) offer checking and savings accounts, small-dollar loans, debit cards, cash withdrawals and money transfer services in each of its roughly 30,000 offices.
{mosads}The proposal has been popular among liberals for several years, but has earned recent mainstream support from prominent progressive politicians. Supporters of postal banking say it could give millions of Americans in areas without banks access to essential financial tools.
U.S. post offices offered banking services in the early 20th century, and supporters of bringing back the practice say it would help undercut predatory lenders and short-term, high-interest “payday” loans.
“For millions of families who have no access or limited access to a traditional bank, the simple act of cashing a paycheck or taking out a small loan to fix a car or pay the gas bill can end up costing thousands of dollars in interest and fees that are nearly impossible to pay off,” said Gillibrand, who is seen as a possible 2020 presidential candidate.
“Millions of Americans are being forced into payday lending schemes that only exacerbate their money problems, and Congress has the ability to wipe out these predatory practices right now by creating a Postal Bank that would be accessible to everyone, everywhere.”
Gillibrand is one of several liberal senators who has supported postal banking. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have also called for expanding financial services to post offices.
Liberals have rallied behind postal banking as a way to serve poorer U.S. neighborhoods with few, if any, bank branches and that are primarily served by payday lenders and other similar entities.
Democrats have fought against the payday lending industry, and the Consumer Financial Protection Bureau issued a rule last year meant to protect vulnerable customers from being trapped in cyclical debt from high-interest loans. Republicans are attempting to repeal that rule through the Congressional Review Act.
Postal banking supporters also tout the practice as a way to pull the USPS out of its deep financial troubles.
The USPS has reported losses for every year since 2007, and lost $2.7 billion in 2017 alone. President Trump earlier this month announced that he was launching a task force to look at the viability and operations of the postal service.
“The postal service could make billions of dollars a year by establishing basic banking services so lower-income people have access not to these payday lenders but to someplace where they can be treated with respect,” Sanders told Vice News recently.
Bankers and their Republican allies in Congress say lawmakers should focus on helping banks expand their services to troubled areas by cutting and modernizing regulations. They’ve also expressed skepticism that the financially distraught USPS could effectively offer safe, reliable banking services.