Sen. Kirsten Gillibrand, a potential Democratic 2020 presidential contender, introduced legislation Wednesday to allow banking services to be provided in post offices as a means of the government providing an alternative to payday lenders.
“Millions of Americans are being forced into payday lending schemes that only exacerbate their money problems, and Congress has the ability to wipe out these predatory practices right now by creating a Postal Bank that would be accessible to everyone, everywhere,” the New York Democrat said.
Gillibrand’s proposal would put a bank branch in each of the 30,000-plus U.S. Postal Service locations that would provide basic banking services, such as savings and checkings accounts and small-dollar loans.
Democrats, including Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., have kicked around the idea of postal banking for years. It’s an idea that could prove popular with voters in a primary election.
The idea is that the post office has branches in all of the poor communities that disproportionately rely on payday lending because they cannot afford regular banking services.
The Postal Service’s inspector general floated the possibility of postal banking as a way to shore up the Postal Service’s finances.
Liberals have sought to regulate payday lenders at the federal level. Last year, the Consumer Financial Protection Bureau, under Obama appointee Richard Cordray, finalized sweeping regulations of small-dollar rules that the industry said would effectively eliminate their business. But acting director Mick Mulvaney, a Trump appointee, delayed the rule in January.
