“Americans spend $103 billion a year on predatory lenders. Postal banking could change that.”

Laura Clawson, Daily Kos Labor, January 22, 2015

Nearly 17 million American adults live in households where no one has a checking account; more than 50 million more have a checking account, but also have to rely on things like payday lenders and check cashing stores, according to a new report from United for a Fair Economy. These numbers include more than half of black households and nearly half of Latino households, and it takes a huge toll: these overwhelmingly low-income households spend around $3,000 a year—more than 10 percent of the total annual income for many—on interest and fees to predatory fringe lenders, adding up to $103 billion a year nationwide. But there’s an easy answer to make affordable, reliable banking services available to most of these people: postal banking.

A new campaign has launched to press for postal banking, David Dayen reports, with groups like Americans for Financial Reform, Public Citizen, and Interfaith Worker Justice joining with postal unions to press for this solution to the problem of predatory lending and to revenue problems at the Postal Service.

With over 31,000 branches and a high level of trust among the public, post offices, which already perform some financial services through money orders and international money transfers and used to offer savings accounts from 1911-1967, can fill the need for affordable banking alternatives by providing debit cards, savings accounts and even small loans. The physical reach of the post office is a major asset. “Thirty-eight percent of zip codes in this country have no bank; every one of those has a post office,” the APWU’s Dimondstein said. […]… in contract negotiations slated to begin February 19, the APWU plans to demand postal banking as part of a menu of revenue-raising options. “Our position is to expand and enhance postal services, not undermine them and degrade them,” APWU president Mark Dimondstein says. “Financial services will be on the table, it’s a significant area where we will have a conversation with the Postal Service management.” While seeking service changes is somewhat unusual in a labor contract, in this case, Dimondstein believes it connects directly to wages and hours for postal employees.

Postal banking would be a win-win for low-income people, jobs, and anyone who likes to get mail—it would be a loss, though, for people who want to privatize government services and those who would specifically profit from weakening the Postal Service. Of course, we know how a typical fight pitting low- and middle-income people against the very wealthy usually turns out. But that’s why it’s important to actually make this a fight.