Tell Congress: Postal banking, not payday lending.

Tell Congress: Postal banking, not payday lending.

With average payday loan interest rates as high as 338 percent and check-cashing shops charging exploitative fees, more struggling Americans get trapped in inescapable cycles of debt every single year.1

It's no accident: It's the deliberate strategy of Wall Street-backed lenders that vacuum billions of dollars out of low-income communities every year.2 To break the grip of the predatory financial industry we need tough enforcers, strict rules – and a public option like postal banking to serve as a low-cost alternative.

Progressive champions like Sen. Elizabeth Warren have championed postal banking for years and pushed the U.S. Postal Service to use its existing authority to launch pilot programs. Now, Sen. Kirsten Gillibrand has expanded the fight by introducing new postal banking legislation.3

Tell Congress: Postal banking, not payday lending.

The dirty secret of the payday lending industry is that there is no money in people repaying their loans on time. The key to the whole profit-making engine, the one that makes lenders’ Wall Street backers rich, is tricking people into taking out a loan and then locking them into months or years of debt. Charging hidden fees and demanding sky-high interest rates, payday lenders are little more than legal loan sharks.4

A full postal banking system would offer a low-cost alternative to the most predatory companies. Low-income neighborhoods often lack commercial bank branches, and many struggling families without access to mainstream banks have little choice but to turn to check cashers and payday lenders. Postal banking would offer basic services like check cashing, savings accounts and cheap loans so that one unexpected expense doesn't trap someone in debt for life.5

The USPS has done this before, from 1917 until 1967. In 1947, the post office held nearly 10 percent of commercial savings in the United States.6 The USPS can do a lot to bring back postal banking on its own and many progressive allies have been pushing for just that. Sen. Gillibrand's new bill adds to those efforts by putting postal banking back on the agenda in a big way.

Tell Congress: Postal banking, not payday lending.

Some have looked to postal banking as a way to increase revenue for the USPS. But Sen. Gillibrand's bill focuses solely on providing an alternative to payday lenders, thus helping the most vulnerable Americans. The reality is that the USPS' supposed budget woes stem from a deliberate right-wing attempt to sabotage a vital government service by mandating that the agency pre-fund its retiree health care and pension benefits for 75 years – something that no other government agency or private company is forced to do.7

Sen. Gillibrand's bill keeps the attention where it belongs: keeping low-income Americans out of the clutches of a predatory financial industry that wants to trap them into debt and exploit them for all they are worth. Postal banking is an idea whose time has come again, and a big show of support for this bill will provide momentum to every effort to make it real.

Tell Congress: Postal banking, not payday lending.

Thank you for speaking out.

References:

  1. David Dayen, “The Government is Finally Cracking Down on Legal Loan Sharks,” Fiscal Times, March 27, 2015.
  2. Ibid.
  3. Alan Pyke, "Gillibrand’s post office banking bill bypasses years of careful, quiet work to kill payday lending," ThinkProgress, April 27, 2018.
  4. Dayen, “The Government is Finally Cracking Down on Legal Loan Sharks.”
  5. Pyke, "Gillibrand’s post office banking bill bypasses years of careful, quiet work to kill payday lending."
  6. Campaign for Postal Banking, "Know the Facts: Is Postal Banking a New Idea?" accessed May 1, 2018.
  7. Pyke, "Gillibrand’s post office banking bill bypasses years of careful, quiet work to kill payday lending."

Petition to Congress:

"Protect low-income Americans from predatory Wall Street-backed payday lenders and check cashers by supporting postal banking and the Postal Banking Act."

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