POSTAL SERVICE BANKING PROPOSAL
- ICBA opposes allowing the U.S. Postal Service to provide financially-related services.
- The USPS’s governmental status would allow it to eventually become another financially-related government-sponsored-enterprise.
- The USPS’s financial challenges should restrain, not facilitate, expansion of USPS activities.
- The USPS’s financial services activities would threaten the existence of many community banks including those in remote and rural regions of the United States.
- Ultimately, Americans would be harmed by the USPS’s encroachment into financial services as they would lose their ability to deal with locally-based professional banking staff.
ICBA adamantly opposes allowing the U.S. Postal Service (USPS) to offer financial products and services, as advocated by the Office of the Inspector General for the U.S. Postal Service in a January 2104 white paper. These activities would include loan making, deposit taking, and other services that are fundamental to community banks. The encroachment into these activities by a major federal agency would represent a significant, government-sponsored, competitive threat to the ongoing viability of the nation’s thousands of private sector, tax-paying community banks that do an excellent job of serving consumers, small businesses and farmers and ranchers across America.
Financial services is a highly specialized industry in which dedicated, expert management is critical. It is extremely dangerous policy to expect USPS to continue providing their core services of delivering letters and packages while managing a multi-billion-dollar loan portfolio. Without focused management attention and experienced financial risk managers, the provision of financial services could exacerbate USPS’s very significant fiscal problems. In addition to the harm done to consumers and community banks, USPS financial services could quickly become a source of staggering losses in need of a taxpayer bailout.
In an effort to soft-pedal this government advantaged competitive threat, USPS representatives have suggested they would work with the banking industry on the products and services they offer. The reality is that the USPS’s financial services would compete directly against community banks, would be offered through the nation’s largest banks, and would displace community banks in all regions of the country, including America’s most rural and remote areas.
The USPS’s fiscal problems should not become a misguided excuse to intrude into other unrelated industries. These financial difficulties should be a reason to oppose – not promote – expansion of the USPS so that their management remains focused on bringing the USPS to viability within its own industry.