Rep. Cedric Richmond (LA-2) Introduces “POSTAL Act of 2015”

Representative Cedric Richmond (LA- 2) Introduces “POSTAL Act of 2015”

On February 1, 2016 Rep. Cedric Richmond introduced in the House of Representatives H.R. 4422, the “Providing Opportunities for Savings, Transactions, and Lending Act of 2015.” The Bill would allow the US Postal Service to provide basic financial services including 1) small dollar loans, 2) checking accounts, 3) savings accounts, 4) services relating to international money transfers, and 5) other basic financial services as the Postal Service considers appropriate in the public interest. Additionally, the bill would allow the creation of a Postal Card as a means of allowing users to engage in those financial services.

H.R. 4422 has been referred to the House Committee on Oversight and Reform.   H.R. 4422 is a re-introduction of H.R. 5179 which Representative Richmond proposed in the 113^th Congress.

In a Feb. 2 press release, Rep. Richmond stated, “Currently millions of hard-working Americans do not have access to fair and reasonable financial services. Allowing the USPS to offer small-dollar loans and transactions would save working families thousands of dollars and reduce their dependence on predatory lenders.”

Postal banking is not new to the US. In 1910 Congress established the Postal Savings System.  By law most of the money taken in by the Post Office Department (POD) was redeposited in local banks.   Those banks paid the POD. 2.5% interest.  The POD paid depositors 2% interest, using the remaining .5% to pay for the operation of the system.  The Postal Savings System quit taking deposits in 1966, and officially ended on July 1, 1967.