Could a return to the Postal Savings System save the U.S. mail?

Sep 18, 2020

Is the old Postal Savings System the key to restoring the finances of the U.S. Postal Service and helping rural and urban poor? Two U.S. senators believe it is.

Sens. Kirsten Gillibrand (D-New York) and Bernie Sanders (D-VT) say their proposal would shift poor people from being dependent on pay day loans and check cashing services and let them establish bank accounts and obtain credit cards and cheaper loans at the post offices in their neighborhoods.

Sanders said that means mail would still be coming to homes on rural dirt roads.

"It is for low-income people, as Kirsten just said. It's for small businesses. It's for the minority community. It's for rural communities," Sanders said. "It's maintaining universal mail service, because we're going to add $9 billion a year to the revenue base of the Postal Service."

From 1911 to 1967, the Postal Savings System was the bank for vast sections of the country until abolished, when Washington decided the banking system covered those areas and that the public didn't need banking and stamps at the same time.

Gillibrand said these revived postal banks would solve racial issues.

"Closing the wealth gap between Black and white America. And it is because once you can have a bank account, you get to save all that predatory cash that goes out the door when you need that pay day loan or you need to wire money to a family member or any other emergency need. That wealth goes back into your pocket. It goes back into Black families for generations," Gillibrand said.

The two senators said poor people spend $100 billion a year in predatory financial operations like check-cashing services. They said the proposal would also help areas - especially rural areas - where no banks exist.