Banking Chairman Brown Pushing Federal Digital Wallet Proposal
“We need to get everyone access to basic bank accounts that don’t come with abusive fees."
Senate Banking Chairman Sherrod Brown (D-Ohio) is renewing his push for legislation that would allow anyone to set up a free bank account, known as a FedAccount, at any credit union, bank or Post Office.
The digital wallet could be used to receive any direct stimulus payments related to the pandemic, as well as any funds received as a result of expanded tax credits.
Brown introduced his “Banking for All Act” during the last Congress, but it never was considered by the Banking Committee. However, since Democrats control the majority in Congress, the legislation could be considered after Brown reintroduces it.
He discussed his intention to do just that during a roundtable discussion with Ohioans on Friday.
“The pandemic has revealed a lot of problems our country has ignored for too long – health inequities but also economic ones,” he said. “Right now, the less money you have, the more you pay to use it.”
He said that 22% of families cannot open a basic bank account and must rely on non-traditional financial services, such as check cashing companies.
“We need to get everyone access to basic bank accounts that don’t come with abusive fees,” he said.
Under Brown’s proposal, FedAccounts would be available at local banks, credit unions and Post Offices, with no account fees or minimum balance requirements. Account holders would receive debit cards, online account access, automatic bill-pay, mobile banking, and ATM access at Post Offices.
While the legislation did not move during the last Congress, CUNA President/CEO Jim Nussle sent a letter to the Banking Committee, when it discussed digital wallets.
In his letter, Nussle said that while CUNA supports the spirit of proposals to create FedAccounts, the trade group believes that people would be best served by leveraging the banking system already in place.
He said that there is no need to pass legislation to authorize Post Offices to provide services that already are available.
“Instead, Congress should be using its public platform to encourage all consumers, especially the most vulnerable among us, to seek out financial services from a community-based, not-for-profit credit union,” he wrote, adding that, “As the nation’s original consumer financial protectors, credit unions have a long history of providing affordable, responsible access to banking services.”
On a separate track, some Democratic members of Congress are renewing the push to allow Post Offices to offer basic banking services. They contend that the U.S. Postal Service could raise much-needed revenue by offering banking services. And they say that Post Offices could provide financial services in underserved areas.