The U.S. Postal Service’s inspector general yesterday released a report offering examples of how USPS could expand its financial services offerings and arguing that these services “could be extremely popular.”
The report outlined several approaches USPS could take. One would be to expand the current financial services offerings it has legal authority to provide, such as money transfers, bill payment and check cashing. Another approach — should USPS be granted sufficient authority — would be to partner with one or more financial institutions to provide prepaid cards and small-dollar loans.
A third broad approach would be to turn post offices into a “marketplace” for multiple financial institutions to offer products and services that meet certain standards, and the final approach studied would see USPS set up its own “post bank,” which the report said “could have the biggest benefits for the underserved, but the process for establishing a post bank would likely be lengthy and difficult.”
ABA pushed back against the report’s conclusions. “We remain concerned about the impact that expanding the role of USPS into the realm of traditional banking could have on community-based institutions,” said ABA EVP Ken Clayton. “USPS could be perceived as a government-endorsed and preferred provider of financial products. This would harm the ability of local institutions to serve their customers and meet the needs of their communities.”