Bill Overview
Title: Postal Banking Act
Description: This bill grants the U.S. Postal Service (USPS) the power to provide basic financial services, including low-cost, small-dollar loans, in specified amounts; small dollar lending servicing, which shall ensure that the customer's access to the products and the public interest is given significant consideration; small checking accounts and interest-bearing savings accounts in specified amounts; transactional and remittance services; and other basic financial services in the public interest. It grants the USPS the power to set interest rates and fees for the financial instruments and products provided by the USPS that meet specified requirements. The USPS (1) shall not be granted a bank charter or become an insured depository institution for the purpose of capital requirements, and (2) shall be subject to the provisions of the Uniform Commercial Code regarding bank deposits and collections. The Federal Reserve Board of Governors shall transfer to the USPS such sums as necessary to carry out the services described in this bill, which shall (1) be sufficient to ensure that the products substantially decrease the number of people who do not have a bank account or use alternative financial products such as payday lending, check cashing, prepaid debt cards, and overdraft fees; and (2) be provided to the USPS through a separate account. The Government Accountability Office shall submit to Congress an annual report that includes the demographics, number of participants, and average balances and uses for such products.
Sponsors: Sen. Gillibrand, Kirsten E. [D-NY]
Target Audience
Population: Unbanked and underbanked individuals worldwide
Estimated Size: 24000000
- The bill is centered around providing financial services, which suggests it primarily targets individuals who are currently unbanked or underbanked.
- Global estimates suggest that about 1.4 billion adults worldwide are unbanked per the World Bank as of recent data, but unbanked populations can vary significantly by country.
- This bill proposes services like small loans and checking accounts, typically needed by individuals with low to moderate income who do not have access to traditional banking.
- The bill specifies that these services should substantially decrease the number of people who do not have a bank account or use alternative financial products such as payday lending.
- Given that it describes providing services that traditional financial institutions may not offer, it is likely targeting those who are financially underserved.
Reasoning
- The Postal Banking Act is designed to assist unbanked and underbanked individuals, primarily targeting low-income or underserved communities who struggle with access to traditional financial services.
- Given the financial barriers experienced by these groups, it is expected that enabling access to affordable banking services could significantly impact their financial stability and wellbeing.
- Since the bill provides capital but restricts USPS to basic financial services without a bank charter, it could effectively reduce reliance on high-cost alternative financial products like payday loans.
- The population impacted by the Postal Banking Act will vary across different demographics, such as age, income, and geographic location, and the interviews should reflect this diversity.
- The policy could also potentially alter how certain businesses operate if their clientele shifts to using USPS banking services instead.
- The improvement in wellbeing would be measured over time, predicting immediate effects on stress reduction related to financial distress and gradual effects on financial literacy and stability.
Simulated Interviews
Retail Worker (Dallas, Texas)
Age: 34 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The high fees for check cashing services eat into my income, making it hard to manage my finances.
- If the USPS offered low-cost financial services, it would give me more control over my money and reduce stress.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 5 |
Construction Worker (Newark, New Jersey)
Age: 45 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I've been trapped in cycles of debt because of payday loans.
- Affordable loans from USPS could really help me improve my financial situation and reduce stress.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Freelancer (Salt Lake City, Utah)
Age: 29 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Being unbanked limits my options for receiving payments from clients.
- The policy could streamline how I handle finances, freeing up time and resources to grow my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Retired (Rural Mississippi)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I'm tired of losing money to fees for cashing my Social Security checks.
- With postal banking, I could save money and have better control over when and how I get my funds.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Small Business Owner (Chicago, Illinois)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- Banking with a postal service could lower my overhead costs significantly.
- If the transition is smooth, it could save money better used in expanding my operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Part-time Worker (Los Angeles, California)
Age: 62 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The constant fees on my accounts make saving money difficult.
- Postal banking could mean keeping more of my income, especially on a limited budget.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Warehouse Worker (Detroit, Michigan)
Age: 25 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I've avoided traditional banks because I think their fees are too high for what I earn.
- This policy seems like it would provide a good starter banking service for someone like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Healthcare Worker (Miami, Florida)
Age: 49 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- Limited banking options have made budgeting a hassle.
- USPS providing financial services could reduce surcharges and improve my ability to save.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Gig Worker (Phoenix, Arizona)
Age: 38 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- It's hard to make consistent savings when PayPal and Venmo are my main banking options.
- If USPS offers competitive savings accounts, I could finally start saving more seriously.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
IT Technician (Seattle, Washington)
Age: 32 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 9/20
Statement of Opinion:
- I like the convenience of my current bank but am curious about USPS offerings.
- If they offered competitive savings or loans, I might consider switching.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Cost Estimates
Year 1: $5000000000 (Low: $4000000000, High: $6000000000)
Year 2: $4600000000 (Low: $3600000000, High: $5600000000)
Year 3: $4400000000 (Low: $3400000000, High: $5400000000)
Year 5: $4200000000 (Low: $3200000000, High: $5200000000)
Year 10: $3800000000 (Low: $2800000000, High: $4800000000)
Year 100: $2500000000 (Low: $1500000000, High: $3500000000)
Key Considerations
- Potential challenges in adapting USPS infrastructure for banking services which is traditionally logistic-focused.
- Regulatory oversight and the ability to scale effectively without traditional banking systems will be essential.
- The role of Federal Reserve in providing funds and managing the economic implications of this transfer.
- Risk management in terms of non-performing loans and financial fraud within the USPS ecosystem.
- Long-term sustainability and competitive effects on existing financial institutions.