WASHINGTON — Sen. Kirsten Gillibrand, D-N.Y., on Wednesday unveiled a bill that would empower the U.S. Postal Service to take deposits and make loans, a move she said would "wipe out" predatory lending and improve consumers' access to financial services.
The Postal Banking Act would place a retail bank branch in each of the Postal Service’s 30,000 locations — branches that would provide “low-cost, basic financial services to all Americans,” according to a press release.
In a tweet, Gillibrand said that the legislation would “wipe out the predatory practices of the payday loan industry overnight by providing an accessible and low-cost alternative."
“The federal government has backed financial institutions directly and indirectly for decades with FDIC insurance, FHA backing, and bailouts,” Gillibrand tweeted. “But those 'for-profit' banks have left too many behind. It's time to close the gap — and this time, no one will get rich on the taxpayers' dime. This is a simple solution to a problem facing every state in this country.”
Legislative language has not yet been released for the bill, but a Gillibrand spokesperson said that the text should be introduced later Wednesday.
The idea of having the Postal Service offer banking services goes back more than a century, and the Postal Service’s inspector general reignited the debate in 2014 with a white paper suggesting that the agency could and should provide financial services at its offices in order to meet consumer demand in locations that lack traditional banking alternatives.
Many influential Democrats — including Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt. — have endorsed the idea. It has also won support from community activists and was included in the Democratic Party’s 2016 platform.
But some advocates, including the USPS inspector general who sparked renewed interest in the idea, have acknowledged that Congress may need to pass legislation to make postal banking a reality.