Kirsten Gillibrand Unveils Her Ambitious Plan to Turn the Post Office Into a Bank

[LastLiberal in PalmSprings]

Add New York Senator Kirsten Gillibrand to the list of big name Democrats who want the U.S. Postal Service to double as a bank. The potential 2020 contender is rolling out legislation today that would require post offices to offer their customers basic financial services, such as checking and savings accounts and small, short-term loans, that many Americans currently can’t access affordably. While the idea of postal banking has been backed by progressives like Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont—both likely presidential candidates—Gillibrand’s bill gives an important policy objective a high-profile, useful boost.

Postal banking is a pretty straightforward solution to a nagging problem: Today, too many Americans are cut off from run-of-the-mill financial services. As of 2015, 7 percent of households were unbanked (meaning, they had no bank account at all) and another 19.9 percent were underbanked (meaning they had to rely on expensive and often predatory alternative options like payday lenders or check cashers to deal with their money needs). Some people who lack any kind of account say they simply don’t trust banks; others complain that fees are too high, they don’t have enough money to deposit, or that there aren’t convenient branches. Having a familiar local post offices provide checking accounts that don’t require a minimum balance, debit cards, and other services would be an easy fix that could save Americans a great deal of money. A Postal Services Inspector General report exploring the idea pointed out that, in 2011, the average underbanked American spent $2,412 getting financial services. That’s a lot of money needlessly flowing to companies like ACE Cash Express.

Slate.com

This is one of those issues that tends to slip under the radar because it's not "sexy." It costs a lot more to be poor in America than it costs to be middle class or rich.

[bdtrppr6]

1. sounds good but

"an easy fix that could save Americans a great deal of money" is not something most of our leaders give an actual shit about. pretty sure the bank lobbyists are already in motion against that thought.

[SFnomad]

3. Aren't these mostly people that don't have enough money to be banking customers?

Though I would expect the lobbyists for pay-day loan vultures will certainly be fighting this.

[TheSmarterDog]

5. Banks are req'd to offer free or nearly free basic checking.

Free checking costs them money.

[Ccarmona]

2. The Anti-Unionists Will Also Throw Up Roadblocks

Since the Postal Workers Union is one of the last remaining strong Unions in the Country.

[Hortensis]

4. Gillebrand's running for reelection. This is a safe and

nicely progressive issue that should appeal to a pretty broad swath in her district. As said, it's an existing Democratic Party plan, something done in other nations, to help both the embattled USPS AND lower-income people with post offices nearby. And if we get control of congress, we can even move ahead with a version of one of these bills. Perhaps hers.

Being "boring" is actually a distinct advantage in getting laws passed these days. It lets the two parties quietly work together. Our knowing about them is not a requirement for passing legislation, but when we're paying attention it's usually been made into a partisan wedge.

Unfortunately, though, in this case the right's Dark Money manipulators have no intention of boosting the roles and income of the USPS. That would not further their goals of taking it away from us and mining it for our gold.

[stonecutter357]

6. Franken 2020 !

[JI7]

8. I hate what she did to Franken but this is a really good plan

[procon]

7. The USPS already offered a public banking system from 1911 to 1966.

I remember the postal banks from when my grandma opened a savings account for me. They were called the “the poor man’s banks" and immigrants made "more than 70 percent of the postal bank’s deposits". The postal banks were so popular that they had "$1.2 billion in assets—about 10 percent of the entire commercial banking system".

USPS banks sold Treasury bonds and war bonds, and during "World War II, the government had raised $8 billion in war funding from the post office alone." In 1966 the postal banks were officially abolished as part of Lyndon Johnson’s streamlining of the federal government.


Interesting history of this little known public service:
http://www.slate.com/articles/news_and_politics/history/2014/08/postal_banking_already_worked_in_the_usa_and_it_will_work_again.html


Given the potential for scams and the high fees charged to get access to your paycheck, this service would be very useful for low wage workers, military families, students, the disabled and elderly, people on public assistance, or people who move around alot. I hope it is restarted.

[LastLiberal in PalmSprings]

9. The depth of DUers' knowledge is one of the reasons I love coming here.

Either through experiences, curiosity or research, so many people bring so much to the table that logging onto DU is like taking a seat at a banquet table, especially for an information junkie like me.

Thanks for adding to the conversation.

[TeamPooka]

10. It's cause we're old. :)