Postal banking is a relatively new concept, but it’s already making waves in many countries around the world, including the United Kingdom, Switzerland, and Japan.
banking has been on the table in the U.S., as well, thanks to Senator Elizabeth Warren’s introduction of the Postal Banking Act of 2017 and Senators Bernie Sanders and Kirsten Gillibrand’s postal banking bill.
The American public seems to support postal banking as well—a recent poll found that two-thirds of Americans are open to the idea of postal banking.
So why does postal banking seem like such an attractive option?
What is postal banking?
Postal banking is an idea with a lot of merit; particularly now that more and more How to choose bank branches are closing.
Postal banking is simply a variation on checking accounts. It’s exactly what it sounds like—your local post office offering you some basic financial services, much like your local bank.
Postal banking is common in much of the world and was once available in the United States. Despite being commonplace in other countries for decades, America has never taken advantage of postal banking.
Why do we need it?
It’s no secret that there are certain neighborhoods in our country that are underserved by commercial banks.
They’re either bank deserts where branches are sparse and financial services are limited or banking deserts—neighborhoods where less than half of residents have bank accounts.
Without access to these basic financial tools, low-income individuals are often more vulnerable to fraud and identity theft.
What will it look like?
If a customer visits their local post office and asks for a bank account, they will be handed an application.
If approved for an account (and all that that entails), a customer would have access to many of the same services as other banks—debit cards, savings accounts and low-cost loans.
Your customers can also use their post office’s ATMs and mail centers to deposit checks or cash money into their account.
How can I get involved?
Find out if there’s a postal banking system in your country—or if one is being considered.
Then ask yourself what services you could provide for people who don’t have access to (or can’t afford) traditional banking services.
Do you know someone who is currently doing that? If so, speak with them about their process and how they got started.
Who supports it?
The idea of postal banking isn’t new. President Jimmy Carter supported it and as recently as 2011, New York Senator Kirsten Gillibrand introduced a bill that would have allowed post offices to offer savings accounts, but it didn’t go anywhere.
Still, surveys show American support for postal banking has grown over time. A 2014 Rasmussen poll found 43 percent of Americans support it and only 39 percent oppose. Among millennials—who are likely to be underserved by banks—support for it is even higher.
When will it be available?
There is no concrete date yet for when Postal Banking might be available for Americans; it’s been rumored since 2013 that Rep.
Cedric Richmond (D-La.) will reintroduce a postal banking bill in Congress. But with Republicans holding majorities in both houses of Congress and President Donald Trump leading executive branch, its future is uncertain.
Who opposes it?
In 2013, Big Banks and some Republicans pushed hard against a proposal by Sen. Elizabeth Warren (D-Mass.) to start postal banking.
Although she ultimately was not successful in getting postal banking passed, it’s still an option at some point down the road.
Who supports it?: Financial institutions that would face fierce competition from postal banks are opposed to postal banking.
Naturally, then, most supporters of postal banking are unions and consumer advocates who see it as a way for low-income consumers to get services they currently don’t have access to from traditional financial institutions.
There are also some libertarians who support postal banking because they see private banks as unnecessary middlemen between you and your money—and also a government monopoly on currency.