Bernie Sanders and Elizabeth Warren Push to Let USPS Offer Cash Advance Loans
There’s been a lot of talk about cash advance loans. Many feel the fees are excessive, others feel they are necessary. If you’re short on cash and have an urgent repair looming, such as a broken heating system, sometimes a payday loan is the best way to get the cash you need until your next paycheck. Two politicians think they have an answer that will appeal to everyone while also helping the USPS balance their books. The idea is to let the USPS offer alternatives to payday loans, car title loans, and other cash advance loans.
Taking a Page From the Past
Senator Elizabeth Warren and Senator Bernie Sanders came up with the idea to turn back to something the USPS used to do. In past decades, the postal service accepted account deposits. These accounts were an option to a bank accounts, something people were leery of having following the Great Depression. However, as banks increased their interest rates to help people earn cash while their money sat untouched in an account, people turned back to traditional banking. This left the USPS with no choice but to stop offering basic bank accounts.
The idea is to let the post office help low-income people set up basic bank accounts. According to the FDIC, 9.6 million households do not have a bank account at all. Almost 25 million do have accounts, but resort to payday loans to get the cash they need. Sometimes, there is no bank close enough for these people to visit, yet all of these communities have a post office.
People will be able to go into the USPS and cash checks and take out small loans that are paid back quickly. This isn’t too absurd. The USPS currently offers international money transfers and money orders. If allowed to start offering other banking services, it’s believed the USPS could be pulling in $8.9 billion a year. Those who do not qualify for bank loans gain a new option. Plus, the post office has a new form of income that might help them stop laying workers off and raising postage rates.
Where Things Stand
In December 2015, a petition with more than 150,000 signatures made its way to the deputy postmaster general. The postmaster general is considering the idea, but she admits she has a few concerns about getting approval from the public and the ability of current post offices to handle expanded banking services.
If this does pass as hoped, you’ll be able to go to your local post office to cash checks, deposit funds, and take out small loans to pay for emergencies like car repairs, broken furnaces, and plumbing disasters. It will be a huge win for people who fear the government will soon put payday lenders out of business.