Gillibrand calls on congress for U.S. Postal banking
Lawmakers say expanded programs will help financially underserved Americans recover from economic crisis.
WASHINGTON, D.C. — Last week, U.S. Senators Kirsten Gillibrand (D-NY) and Bernie Sanders (I-VT), and U. S. Representatives Alexandria Ocasio-Cortez (D-NY), Bill Pascrell (D-NJ), and Marcy Kaptur (D-OH) called on Congress to implement postal banking pilot programs in rural and urban communities across the country as part of the Fiscal Year 2022 (FY22) Senate and House Financial Services and General Government Appropriations (FSGG) Appropriations Bill and eventual final conference agreement. The lawmakers also pushed for $6 million in funding for USPS in FY22 to carry out the pilot programs to expand non-bank financial services offerings.
“Mainstream financial institutions and predatory lenders often take advantage of underbanked Americans with high fees and interest rates that keep them in a cycle of poverty. As families across the country try to recover from the economic crisis, establishing postal banking pilot programs would ensure these communities have financially safe and reliable banking services,” said Gillibrand. “Expanding basic financial services at post offices in both rural and urban communities would help families who know just how expensive it is to be poor in America. This pilot program takes important steps to help struggling Americans and reintroduce widespread postal banking. I am proud to work alongside my colleagues to ensure it is included in the FSGG Appropriations Bill.”
“So many families in my community in The Bronx can’t afford to be banked. So instead, they go into checking cashing places and pay relatively large fees – money that’s desperately needed for food, rent and diapers. Others go the ATM, and sometimes they can only afford to take out $5, but they’re paying $3 in fees. What we are asking the Post Office to do here is very basic – checking cashing, money wiring, and taking out money from an ATM without a penalty – but it’ll make a dramatic difference in so many communities and so many families. It’ll also provide needed revenue to USPS,” said Rep. Ocasio-Cortez.
Millions of Americans live in ‘bank deserts’ — regions without immediate access to a brick and mortar bank — and nearly 63 million Americans are considered underbanked. Ninety percent of the zip codes lacking a bank or credit union are in rural areas. However, low income communities of color are also historically underserved by mainstream financial services — approximately 46% of Latino households and 49% of African American households are underbanked.
As families struggle to recover from the economic crisis caused by the pandemic, postal banking will be a critical tool to help Americans overcome financial strain. Postal Banking programs would provide essential banking services to low-income households and rural communities and safe financial alternatives to predatory financial services such as prepaid debit cards, rent-to-own stores, and overdraft fees. Instead of turning to these predatory services, families struggling to make ends meet would gain access to traditional basic banking services through the postal bank pilot program.
Additionally, establishing permanent postal banking services would strengthen the Postal Service by creating a nonprofit bank that offers low-cost checking and savings accounts, ATMs, mobile banking, and low-interest loans. According to a report from the USPS Inspector General, this proposal would create $9 billion in revenue for the Postal Service each year. Senators Gillibrand and Sanders are lead Senate sponsors of the Postal Banking Act, legislation that would establish permanent essential financial services in post offices in every community.