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The Post Office Could Be Your Next Bank

The banking industry in the United States is not known for its pro-customer business tactics. From monthly checking fees, to ATM charges, to constant news about data breaches.

The list goes on. Some Americans may not feel their money is safe or want to deal with the banks in general. Others may simply not have access to a bank or can’t afford to create and manage an account. The creation of a Postal Bank may come to change this.

Where Is The Postal Bank Idea Coming From

No matter the reason, being unbanked can pose a number of issues in today’s modern world. Such as getting a paycheck, applying for a loan, storing your money in a secure location, or getting a credit card. With the modern push for a cashless society, the consequences of not having a bank account continue to increase. It is almost punishing to go without an account.

However, this may all change with recent legislation being proposed in Congress. Senator Kirsten Gillibrand of New York has proposed legislation aimed at giving the Post Office another role: banking. The Postal Banking Act would transform the over 30,000 post offices throughout the U.S. into regional bank branches.

The concept is actually not a new one. Most developed countries have banking services available through their postal system. In fact, the U.S. actually had a United States Postal Savings System that operated from 1911 to 1967. It ceased operation due to competition from private banks after the creation of the FDIC.

So, why create a postal bank?

Reasons For A Postal Bank

Well, the begin, according to a FDIC survey from 2015, over 7 million Americans do not have a bank account. And with the modern money system of today, almost everything money-wise relies on banking. Without a bank, many people seemed to be punished for dealing with money.

An example of this would be receiving a paycheck. While most American get a check to cash at their bank or have a direct deposit, those without have to find a company willing to cash the check for them, which often comes with fees associated with it.

Another key reason to create postal bank system may actually be geared towards saving the U.S. Postal Service (USPS) itself. Over the years, the USPS has lost considerable money. Enough to warrant tweets from President Trump himself.

With the creation of a banking service, the USPS could earn income from loans and other services that could compliment their postal services, bringing in additional income. This could help alleviate the strained budget.

Alright, but what kind of banking services would the USPS provide?

Postal Bank Services

To start, the legislation is proposing the creation of several key banking services found in most banks. This would include low-cost checking accounts, savings accounts, small-dollar loan services, transactional services, and remittance services.

These services would benefit both the community and post-office in many ways. The low-cost checking accounts could serve beneficial to many Americans as most private banks continue to raise fees on simple checking. The savings account could yield a competitive rate, perhaps driving up interest rates in the private sector.

USPS would be able to use these funds to provide loans, in competition to many different companies, such as payday loans, and peer-to-peer lending.

All-in-all, the proposal to make the USPS a bank would serve to potentially benefit the general American public, and the USPS itself. This could lead to potential game changers in the private sector. However, this is all depend on the bill passing. Until then, be sure to look into a bank account that serves you best.

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