Democratic House Appropriators Want Postal Banking Test

Democratic House Appropriators this week jumped on the postal banking bandwagon, calling for a pilot program to test the concept.

In the report accompanying its FY21 spending measure, Democrats on the House Financial Services Appropriations Subcommittee said that post offices could play a crucial role in providing banking services. The subcommittee did not provide any funding for the pilot, but simply gave directions for the Postal Service to test the concept.

“The Committee recognizes that [the Postal Service] is well-suited to provide affordable non-bank financial services, which could provide critical benefits to tens of millions of unbanked and underbanked Americans living in both rural and urban areas,” the subcommittee said in a report accompanying its FY21 spending measure.

That bill will be marked up by the full Appropriations Committee Wednesday. The subcommittee bill is simply the first step in the FY21 appropriations process. The Senate has not yet begun its annual funding process.

The House proposal goes further than the House Democratic appropriators did in their FY 20 report. In that document, the appropriators simply called for the Postal Service to test the use of ATMs in post offices.

In its FY21 report, the House subcommittee noted that the Postal Service is the largest provider of paper money orders in the nation. In addition, the appropriators said, post offices already offer electronic funds transfers and U.S. Treasury check cashing.

The subcommittee said it “encourages” the postal service to carry out pilot programs in at least one rural and one urban zip code. Post offices in those zip codes would offer surcharge-free ATMs, wire transfers, check cashing and bill payment to the “fullest extent” permitted under federal law.

The Democrats cited a postal service Inspector General Report that said the service is well positioned to offer basic banking services. More recently, the Government Accountability Office cast doubt on the idea, saying it would not provide any financial benefit to the Postal Service.

Some Democrats have been pushing the concept of postal banking for years. Last week, presumptive Democratic presidential nominee Joe Biden and progressive Sen. Bernie Sanders (I-Vt.) released an agenda intended to unify the party; that document also endorses postal banking.


Biden-Sanders ‘Unity’ Agenda: Postal Banking, Stricter Enforcement by CFPB

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