Progressive lawmakers call on Congress to reintroduce postal banking

Representative Alexandra Ocasio Cortez (D-NY) and Senators Kristen Gillibrand (D-NY) and Bernie Sanders (D-VT) called upon Congress Thursday to reinstate postal banking, a service which critics caution would lead to the increase in size of the federal government.

"Today, U.S. Senators…and U. S. Representatives…called on Congress to implement postal banking pilot programs in rural and urban communities across the country as part of the Fiscal Year 2022…," the Office of Senator Gillibrand said in a statement.

The legislators pushed for six million in funding for USPS in FY22 during a press conference, advocating for pilot programs to expand non-bank financial services offerings.

Representative AOC, a self-proclaimed democratic socialist, emphasized that reintroducing Postal Banking would help marginalized families in poorer communities.

"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.

Senator Gillibrand, who introduced similar legislation in the past, expressed that private financial institutions act as predators that take advantage of the poorer communities.

"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 Senator 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."

The statement continued that "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 percent of Latino households and 49 percent of African American households are underbanked."

The legislators indicated that instead of soliciting predatory services (like private banks) families struggling to make ends meet would gain access to traditional basic banking services through the postal bank pilot program, a program at the hands of taxpayers' dollars.

Critics of the Postal Banking Act believe that the legislation would increase the size of the federal government, ultimately forcing the people to bail out individuals who are not financially responsible and are unable to pay their bills or loans.

Senators Gillibrand and Sanders are lead Senate sponsors of the Postal Banking Act, a permanent service that would offer financial services in post offices in every community.