Postal Banking Act

II 116TH CONGRESS 2D SESSION S. 4614 To amend title 39, United States Code, to provide that the United States Postal Service may provide certain basic financial services, and for other purposes. IN THE SENATE OF THE UNITED STATES SEPTEMBER 17, 2020 Mrs. GILLIBRAND (for herself and Mr. SANDERS) introduced the following bill; which was read twice and referred to the Committee on Homeland Secu- rity and Governmental Affairs A BILL To amend title 39, United States Code, to provide that the United States Postal Service may provide certain basic financial services, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Postal Banking Act’’. 4 SEC. 2. AUTHORITY FOR THE POSTAL SERVICE TO OFFER 5 CERTAIN FINANCIAL SERVICES. 6 (a) IN GENERAL.—Section 404(a) of title 39, United 7 States Code, is amended— 8 VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4614 IS (1) in paragraph (7), by striking ‘‘and’’ at the 1 end; 2 (2) in paragraph (8), by striking the period at 3 the end and inserting a semicolon; and 4 (3) by adding at the end the following: 5 ‘‘(9) to provide basic financial services, includ- 6 ing— 7 ‘‘(A) low-cost, small-dollar loans, not to ex- 8 ceed $500 at a time, or $1,000 from 1 year of 9 the issuance of the initial loan, as adjusted an- 10 nually by the Postmaster General to reflect any 11 change in the Consumer Price Index for All 12 Urban Consumers of the Department of Labor; 13 ‘‘(B) small dollar lending servicing, which 14 shall ensure that the customer’s access to the 15 products and the public interest is given signifi- 16 cant consideration; and 17 ‘‘(C) small checking accounts and interest- 18 bearing savings accounts, not to exceed the 19 greater of— 20 ‘‘(i) $20,000 per account; and 21 ‘‘(ii) 25 percent of the median account 22 balance reported in the Federal Deposit 23 Insurance Corporation’s quarterly Consoli- 24 dated Reports of Condition and Income; 25 VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4614 IS ‘‘(D) transactional services, including debit 1 cards, automated teller machines, online check- 2 ing accounts, check-cashing services, automatic 3 bill-pay, mobile banking, or other products or 4 partnerships that allow users to engage in the 5 financial services described in this paragraph; 6 ‘‘(E) remittance services, including the re- 7 ceiving and sending of money to domestic or 8 foreign recipients; and 9 ‘‘(F) such other basic financial services as 10 the Postal Service determines appropriate in 11 the public interest; 12 ‘‘(10) to set interest rates and fees for the fi- 13 nancial instruments and products provided by the 14 Postal Service that— 15 ‘‘(A) ensures that the customer access to 16 the products and the public interest is given 17 significant consideration; 18 ‘‘(B) ensures that interest rates on savings 19 accounts are at least 100 percent of the Federal 20 Deposit Insurance Corporation’s weekly na- 21 tional rate on nonjumbo savings accounts; and 22 ‘‘(C) ensures that the total interest rates 23 on small-dollar loan amounts— 24 VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4614 IS ‘‘(i) are inclusive of interest, fees, 1 charges, and ancillary products and serv- 2 ices; and 3 ‘‘(ii) do not exceed 101 percent of the 4 Treasury 1 month constant maturity rate; 5 and 6 ‘‘(11) to provide all financial products and serv- 7 ices in subsection (a) exclusively, ensuring that the 8 customer’s access to the products and the public in- 9 terest is given significant consideration, and not 10 through a partnership or contract with private insti- 11 tutions, including insured depository institutions.’’. 12 (b) NO BANK CHARTER.—The United States Postal 13 Service shall not be granted a bank charter, become an 14 insured depository institution, as defined in section 3 of 15 the Federal Deposit Insurance Act (12 U.S.C. 1813), for 16 the purpose of capital requirements. 17 (c) UCC.—The United States Postal Service shall be 18 subject to the provisions of article 4 of the Uniform Com- 19 mercial Code. 20 (d) REGULATIONS.—The Postmaster General, in con- 21 sultation with the Secretary of the Treasury, the Bureau 22 of Consumer Financial Protection, and the Federal bank- 23 ing agencies, shall promulgate regulations carrying out 24 this Act and the amendments made by this Act. 25 VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4614 IS (e) TECHNICAL AND CONFORMING AMENDMENT.— 1 (1) IN GENERAL.—Section 404(e)(2) of title 39, 2 United States Code, is amended by adding at the 3 end the following: ‘‘The preceding sentence shall not 4 apply to any financial service offered by the Postal 5 Service under subsection (a)(9).’’. 6 (2) FEDERAL RESERVE ACT.—Section 11 of the 7 Federal Reserve Act is amended— 8 (A) by redesignating the second subsection 9 (s) (relating to assessments, fees, and other 10 charges for certain companies) as subsection 11 (t); and 12 (B) by adding at the end the following: 13 ‘‘(u) FUNDING FOR POSTAL FINANCIAL SERVICES.— 14 The Board, in consultation with the Chairman of the 15 Board and the Postmaster General, shall transfer to the 16 Postmaster General such sums as may be necessary to 17 carry out the services described in section 404(a)(9) of 18 title 39, United States Code, which shall— 19 ‘‘(1) be sufficient to ensure that the products 20 described in that section shall substantially decrease 21 the number of people who do not have a bank ac- 22 count or use alternative financial products such as 23 payday lending, check cashing, prepaid debt cards, 24 and overdraft fees; and 25 VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4614 IS ‘‘(2) be provided to the Postmaster General 1 through of an account separate from products not 2 included or allowed under section 404 of that title.’’. 3 (f) RULE OF CONSTRUCTION.—The services offered 4 by the United States Postal Service under section 404 of 5 title 39, United States Code— 6 (1) shall be considered permissible non-banking 7 activities in accordance with section 225.28 of title 8 12, Code of Federal Regulations; and 9 (2) shall not be considered the business of 10 banking under the seventh paragraph of section 11 5136 of the Revised Statutes (12 U.S.C. 24). 12 (g) GAO REPORT.—The Comptroller General of the 13 United States shall submit to Congress an annual report 14 that includes the demographics, number of participants, 15 and average balances and uses for all products described 16 in paragraphs (9) and (10) of section 404(a) of title 39, 17 United States Code, as added by subsection (a) of this 18 section. 19 Æ VerDate Sep 11 2014 18:05 Sep 24, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S4614.IS S4614 pamtmann on DSKBC07HB2PROD with BILLS