At a recent press conference, Rep. Alexandria Ocasio-Cortez described a common scene at the check-cashing places that dot her Bronx neighborhood.
“Imagine showing up and having 10 to 20 percent of your check taken away from you,” she said. “That’s diapers, that’s baby formula, and that’s food that’s taken out of the hands of families just to cash a check.”
Ocasio-Cortez has long advocated for postal banking as an alternative to such predatory financial firms. She recently joined Representatives Marcy Kaptur and Bill Pascrell in drafting a letter signed by 33 members of the House of Representatives, calling for $6 million to be set aside in the federal budget for postal banking pilot programs.
Under their plan, USPS would experiment with offering expanding financial services, including surcharge-free ATMs, wire transfers, check cashing, and bill payment in five urban and five rural ZIP codes.
This would immediately benefit the pilot communities by giving them access to low-fee financial services. Nationwide, millions of people in America have to rely on predatory financial services. The problem is especially severe for people of color. According to an FDIC survey, 13.8 percent of Black and 12.2 percent of Latinx households lack a bank account.
High fees for financial services cost working class people thousands of dollars during their lives, and with big Wall Street banks removing branches from communities of color, it will only become a bigger problem.