The U.S. Postal Service should not move into “postal banking” with new financial services offerings, according to a report issued today by a Treasury Department task force focused on postal reform. The task force was established by President Trump in April 2018.
“Given the USPS’s narrow expertise and capital limitations, expanding into sectors where the USPS does not have a comparative advantage or where balance sheet risk might arise, such as postal banking, should not be pursued,” the task force said. The report instead highlighted areas where USPS could grow revenue without taking on balance sheet risk, such as processing hunting and fishing licenses or renting space to complementary retail establishments.
The American Bankers Association has long opposed granting banking powers to USPS, noting that it might be perceived as a government-endorsed provider competing with taxpaying banks and that it would create risks that USPS is ill-suited to manage. As a representative of banks that use USPS, ABA also supports much-needed reforms to the Postal Service, which the report said is forecast to lose tens of billions of dollars over the next decade.