Representatives Patrick McHenry and James Comer have sent a letter to the Postmaster General slamming the US Postal Service’s “hidden” financial service pilot program.
McHenry is the ranking Republican on the House Committee on Financial Services. Comer is the ranking Republican on the House Committee on Oversight.
The letter is addressed to Postmaster General Louis Dejoy and expresses concerns regarding a United States Postal Service pilot program offering paycheck-cashing services at several East Coast locations.
The two Congressmen point to an article that was published in the Washington Post that said the US Postal Service had begun offering these banking services.
The USPS has long offered money orders, electronic funds transfers, and U.S. Treasury check cashing to customers. In 2016, the USPS issued a statement that it had no intent to pursue banking services.
“The Postal Service’s mission is to provide the American public with trusted, affordable, universal mail service. Our core function is delivery, not banking. To the extent our research concludes that we can legally provide additional services at a profit and without distracting from our core business, we would consider these. However, public policy and regulatory discussions must be addressed before the Postal Service invests in an area outside our core function.”
In 2020, the USPS lost $9.2 billion, a loss that increased by $363 million compared to 2019. This was even while revenue increased by around $2 billion for the year. The postal service is subsidized by tax dollars due to its ongoing inefficiencies.
McHenry and Comer state:
“…not only does USPS lack the statutory authority to expand its non-postal services without congressional approval, but USPS has neglected to share information about this pilot program with the House Committee on Oversight and Reform, the House Committee on Financial Services, and other stakeholders in Congress. USPS’s plans to become involved in financial services is a significant deviation from what USPS communicated to Congress in public and in private.”
According to the letter, the USPS apparently did not disclose banking plans in its reform document entitled ‘Delivering for America: Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence.
“Again, on February 24, 2021, when you testified before the Committee at a hearing entitled ‘Legislative Proposals to Put the Postal Service on Sustainable Financial Footing,’ you never mentioned the prospect that the Postal Service might veer into the financial services industry,” stated the Congressmen.
Comer and McHenry requested an immediate briefing and any information into the planning and implementation of the new program.
Recently, there has been an increase in discussions regarding public banks with the topic being broached at Congressional hearings. President Biden’s selection for the Comptroller of the Currency, Saule Omarova, is on the record as being hostile towards commercial banks. In 2020, she wrote a paper entitled “The People’s Ledger: How to Democratize Money and Finance the Economy” that advocates the complete migration of demand deposit accounts to the Federal Reserve’s balance sheet. A nationalization of retail banking, or subsidized competition from federal banking providers, would have a profoundly detrimental impact on all US financial services.
