Postal Banking: An Idea Whose Time Has Returned?

Lawrence H. WhiteOn September 17th, Senators Kirsten Gillibrand (D-NY) and Bernie Sanders (D-VT) went onFacebook Live to announce their introduction of the Postal Banking Act, a bill that would have the US Postal Service provide a " public option " in some retail banking services. Postal banking has been proposed many times in recent years as a progressive reform. The Joe Biden –Bernie Sanders " Unity Task Force Recommendations "document (p. 74) endorsed the idea in August as a way of " ensuring equitable access to banking and financial services. " Senator Gillibrand introduced a similar billtwo years ago, and  an organization calledThe Campaign for Postal Banking has been promoting the idea since 2014.An important impetus for the recent interest was a2014 white paper by the Inspector General of the USPS entitled " Providing Non-Bank Financial Services for the Underserved. " The Executive Summary of the white paper (p. i) argued that " The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector. " The USPS report in turn drew on a 2012-13 series of reports and reform proposals regarding payday lending by thePew Charitable Trusts.Postal banking has been tried before in the US, asDiego Zuluaga has recently reminded us. Congress enacted a Postal Savings system in 1910, --  following the Panic of 1907 -- mainly as a means for the public to hold deposits guaranteed by the federal gover...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs