WASHINGTON—The Independent Community Bankers of America (ICBA) is urging the Treasury Department to recommend prohibiting an expansion of banking services at the U.S. Postal Service.
In its letter, the ICBA is calling on President Donald Trump’s special task force on postal reform to include the recommendation in its review of the Postal Service. It follows an earlier letter to Treasury House Financial Services Committee Vice Chairman Patrick McHenry (R-NC) noting that Congress in 2006 barred the Postal Service from offering new, non-postal 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. “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.”
According to the BCFP, financial services are best provided in a competitive, private, and free marketplace so they can openly and efficiently benefit customers. The FDIC data show 88% of banks offer small-dollar loans and 81% offer free counseling to underserved consumers. Community bank professionals are educated, trained and experienced in the many and often complex facets of banking, which would not be the case at the Postal Service.
The ICBA further said the Postal Service has roughly $121 billion in unfunded liabilities worth 169% of its 2016 revenues, experienced a massive 2014 data breach affecting nearly one-million customers, and was audited for having insufficient fraud controls. Entering the struggling enterprise into banking would place taxpayers at risk of having to subsidize or rescue it, the ICBA said.