Thursday, July 19, 2018

Bank and CU Trades Urge Lawmakers to Prohibit Postal Banking

Bank and credit union trade groups agree that allowing the post office to offer banking services is a bad idea.

In a July 17 letter to members of the House, bank and credit union trade groups urged support for Congressman Patrick McHenry’s (R-N.C.) amendment to the Financial Services and General Government appropriations bill that would prohibit the U.S. Postal Service from providing banking services. The bill -- along with its amendments -- is scheduled to be considered on the House floor later this week.

While stressing financial institutions’ longstanding support for the U.S. Postal Service -- and acknowledging the need for postal reform -- the letter outlined the risks of turning the postal service into the world’s largest shadow banking system. Providing banking services, the letter warned, “will be beyond the Postal Service’s core competencies, will raise a number of serious regulatory and consumer protection questions, and will present significant competitive issues for private sector entities.”

The U.S. Postal Service itself has agreed with this position, arguing that postal banking would not address its financial challenges, and would almost certainly cause it to lose money.

The letter was signed by the American Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federally-Insured Credit Unions.

Read the letter.

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