Government affairs

Today, Rep. Yvette Clarke (D-NY) introduced a companion bill (H.R.5816) to the Postal Banking Act (S. 2755) introduced by Sen. Kirsten Gillibrand (D-NY) on April 25. The bill would establish a postal bank in each of USPS’s 30,000 locations specifically for low-income Americans who often lack access to traditional banking services and therefore need to rely on the costly payday lending industry

If enacted into law, would allow the Postal Service to offer small-dollar checking accounts, small-dollar savings accounts, small-dollar loans, transactional services and remittance services, such as wire transfers using existing Postal Service infrastructure.

“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 Sen. Gillibrand. “The Postal Bank would solve this problem by putting a retail bank branch in all of the U.S. Postal Service’s 30,000 locations, providing low-cost, basic financial services to all Americans.”

Rep. Clarke and Sen. Gillibrand’s efforts are preceded by similar efforts advocated by Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA), and Rep. Cedric Richmond (D-LA) who have been leading the way on the issue on and off Capitol Hill for years.

“The main reason for the financial problems at the Postal Service stems from a 2006 mandate forcing it to pre-fund 75-years of future retiree health benefits...” said Sen. Sanders in response to the president’s executive order demanding an evaluation of USPS finances. “There is no other private business or government agency that is burdened with such an absurd and draconian requirement. If the Postal Service is going to be a vibrant entity, we must end this Bush-era mandate. We must also allow the Postal Service to raise new revenue by offering innovative new services that the American people need, including basic banking services."

“USPS could partner with banks to make a critical difference for millions of Americans who don’t have basic banking services because there are almost no banks or bank branches in their neighborhoods,” said Sen. Warren in a 2014 op-ed.

In addition, in the past two Congresses, Rep. Richmond has introduced identical measures aimed at protecting communities like the New Orleans area, where financial institutions did not return to certain neighborhoods following Hurricane Katrina.

“In the New Orleans area alone, 181,000 households do not have access to a full range of financial services,” said Rep. Richmond. “These are primarily low-income households that are forced to pay exorbitant interest rates to predatory lenders in order to borrow. Allowing the Post Office to offer some basic financial services would save these households thousands of dollars every year, and put the USPS on more stable financial footing.”

NALC appreciates all legislative efforts that seek to utilize the Postal Service’s infrastructure to serve the public, and will continue to monitor this legislation’s progression.