Postal Banking for USA

Under Gillibrand’s proposal, Americans could cash paychecks and deposit money in accounts free of charge at each post office location. Deposits would be capped at the larger of two amounts ― $20,000, or the median balance in all American bank accounts.

The postal banks would be able to distribute loans to borrowers of up to $1,000 at an interest rate slightly higher than the yield on one-month Treasury bonds, currently about 2 percent.

A postal banking system would be an alternative to the for-profit payday lending system, in which people routinely pay triple-digit fees to borrow money for bills that come due before their next paycheck. The average payday loan of $375 typically costs a borrower an additional $520 in interest and fees, according to Pew Charitable Trusts.

More than one-quarter of Americans households (34 million homes) are either “unbanked” ― meaning they lack someone with a bank account altogether ― or “underbanked” ― relying on payday loans or other so-called alternative lenders to supplement the services of a traditional bank.

Their predicament shows how expensive it is to be poor in America. The average underbanked household has an annual income of $25,500, and spends nearly 10 percent on alternative financial products and associated fees, according to a 2011 KPMG study.

Meanwhile, France’s Banque Postale moves to expand its services in 2019:

French state-owned Banque Postale, part of the French postal service, said on Tuesday it would launch its online bank “Ma French Bank” in spring 2019.
Header Photo by Tim Evans on Unsplash

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