The Independent Community Bankers of America (ICBA) is asking the Treasury Department to prohibit any effort to expand services of the U.S. Postal Service to include banking.
In April, Sen. Kristin Gillibrand (D-NY) proposed legislation to allow post offices to offer consumer banking services.
“For millions of families who have no access or limited access to a traditional bank, the simple act of cashing a paycheck or taking out a small loan to fix a car or pay the gas bill can end up costing thousands of dollars in interest and fees that are nearly impossible to pay off,” Gillibrand said back in April, reported The Hill.
President Donald Trump has appointed a task force to examine the postal service. ICBA is urging Treasury to recommend prohibiting them from offering banking services.
“The Postal Service’s inability to manage its own primary business of selling postage and delivering mail suggests it is ill-equipped to handle any banking function,” ICBA President and CEO Rebeca Romero Rainey wrote in a letter to the Treasury. “The Government Accountability Office last year said the USPS reported a net loss of $5.6 billion in fiscal 2016 — its 10th consecutive year of net losses.”
ICBA says community bankers are experienced and trained in the often complex facets of banking, which would not be the case at the Postal Service.
“While the concept of postal banking is nothing new, it’s still a terrible idea,” Rep. Patrick McHenry (R-NC) wrote in a letter to Treasury Secretary Steven Mnuchin. “According to the Brookings Institution, postal banking would create a government subsidy that puts taxpayers on the hook to finance.”