Given that reality, if we are going to create a financial system that works for all Americans, we have got to stop financial institutions from charging sky-high interest rates and fees.
We did not pick a 15% national usury rate out of a hat. Since 1980, credit unions in the United States, by federal law, have been prohibited from charging interest rates higher than 15%, except under extraordinary circumstances. It's time to apply that law to private banks as well.
Wall Street and its representatives on Capitol Hill will retort that the business of banking is expensive. The big banks, they will claim, must charge outrageous fees to consumers in order to stay afloat, even as they have benefited from taxpayer bailouts, sit on trillions of dollars in assets and reap higher and higher profits from credit-card interest payments every year. The payday-loan apologists will similarly argue that their industry's insane interest rates are still better than illegal alternatives on the black market.
In my view, the solution is obvious. We must make sure that giant Wall Street financial institutions and payday lenders are not the only way Americans can gain access to banking services. We must provide affordable banking options to every person in this country by allowing the more than 30,000 post offices in America to offer basic financial services.
Today, the vast majority of postal services around the world allow their customers to do some form of banking. There are 1.5 billion people worldwide who bank with postal services. The American people should have this option as well, just as they have in the past. Starting in 1911, the US Postal Service offered banking services, and at its peak deposit levels in 1947, the Postal Service had more than 4 million people utilizing its financial services. It was phased out in 1967, an era in which financial crises did not regularly occur. The same logistical know-how that the Postal Service draws on to promptly deliver packages, large and small, anywhere in the country, can surely be used to launch and expand affordable checking, savings, wire-transfer, ATM and small-loan services across America.
The American people are sick and tired of being ripped off by the same financial institutions that they bailed out 10 years ago. We need to put an end to predatory lending and provide affordable banking options to all Americans.
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