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Neighborhood community bankers are taking aim at the U.S. Postal Service Office of Inspector General. The backlash concerns a proposal to significantly expand the number of financial products offered. Expanding post-office services to include banking was examined last year in a report by the USPS inspector general, and is backed by Sen. Elizabeth Warren (D.-Mass.) as a way to bring affordable, basic banking services to low-income neighborhoods. According to the report, these neighborhoods are often ignored by banks, forcing residents to receive services from check cashers and payday lenders with high fees.
However, Independent Community Bankers of America disagrees with Warren’s statements, arguing that USPS is only attempting to enter the banking industry to help fix its own operational, management, and financial troubles.
The trade group represents more than 6,000 community banks of all sizes and charter types.
In a recently released statement, ICBA President and CEO, Camden R. Fine, said that USPS has rung up billions of dollars in losses, is defaulting on required payments to its retiree healthcare plan, and can’t borrow another dime from the U.S. ICBA Treasury. Moreover, it receives an estimated $18 billion annually in taxpayer subsidies and special privileges.
“The Postal Service’s role in delivering the mail does not make it a good fit for handling credit or lending to consumers,” Fine said. “Financial services are being provided competitively in the private sector. The last thing we need is more government intervention in Americans’ personal finances–one that would further put taxpayers on the hook for the Postal Service’s mounting losses. The Office of Inspector General’s proposal would be a disaster waiting to happen.”
Despite the banking community’s opposition, many Americans say they would support the U.S. Postal Service expanding into basic banking and financial services, as indicated by aÂ HuffPost/YouGov poll.
According to the poll, 44% of Americans said they wouldn’t mind the Postal Service offering basic financial services, such as bill paying services, check-cashing, and small loans; 37% said they were opposed to the idea; and 19% said they weren’t sure.