Beginning last fall, postal services were expanded in a handful of cities, a first step toward a return to banking at the U.S. Postal Service.

The Postal Service is testing a pilot program by offering check cashing, bill paying, ATM access, and expanded money orders and wire transfers at select locations, including Washington, D.C., Falls Church, Va., Baltimore and the Bronx. 

Customers can cash payroll checks and business checks and add up to  $500 can be deposited onto a gift card.

Approximately 63 million Americans lack regular access to commercial banking, often turning to high-fee options like check-cashing outlets, money orders and prepaid cards. 

The Postal Service, with more than 34,000 locations, may be able to close that gap. Advocates of postal banking see the Postal Service as a way to improve economic performance while providing access to an essential financial system. 

According to the USPS Office of the Inspector General, even the lowest fee for financial services would generate nearly $9 billion annually if 10% of underbanked Americans used it.

The reestablishment of postal banking beyond the pilot program will, however, require an act of Congress. Legislation seeking to restore postal banking has been supported by progressive members of Congress. 

A bill introduced by Sen. Kirsten Gillibrand (D-N.Y.) would create a postal bank to provide low-cost basic financial services to people without access to the banking system or with limited access. Senator Ted Cruz (R-Texas) and 18 Senate colleagues signed a letter opposing the idea.

This system for Postal Savings had been established in 1910  by a law passed by Congress. Working people and immigrants were encouraged to open bank accounts. 

The program was established in 1911, and by 1947, the deposits had reached $3.4 billion. As more people turned to banks in the 1960s, deposits declined. The Postal Service ceased offering it in 1966.