U.S. Senators Pat Toomey (R-Pa.), Ranking Member of the Senate Banking Committee, John Boozman (R-AR), and a number of their Senate colleagues are raising concerns over the U.S. Postal Service’s postal banking pilot program.
In a letter to Postmaster General Louis DeJoy, the senators questioned the Post Service’s legal authority to implement a banking pilot program that is completely unrelated to its mission of providing “reliable, affordable, universal mail service.” The Postal Service launched its postal banking pilot program in September without notifying Congress.
When reports of the pilot program first went public in October, Ranking Member Toomey immediately raised concerns, saying in a statement:
“You would have to work very hard to come up with a worse idea than having the government become a national bank executed through the post office. Even if the U.S. Postal Service was the most competent, professional, and best-run organization on the planet, they should not be in the business of banking. We have banks. The idea that the government is going to do a better job is just laughable.”
As the senators argue in their letter to Postmaster General DeJoy, the pilot program exceeds the Postal Service’s legal authority and fails to comply with relevant regulations and procedural requirements. The Postal Service’s ill-advised pilot could be used as a step towards nationalizing the U.S. banking system, as President Biden’s nominee for Comptroller of the Currency, Saule Omarova, has proposed.
“The Postal Service’s misguided expansion into consumer financial services raises the troubling possibility of government-run banking in the future,” the senators wrote. “This suggestion is not merely theoretical; one recent legislative proposal would have authorized the Federal Reserve to establish retail bank accounts accessible through the Postal Service. This radical expansion of the government’s role in providing financial services is equally unnecessary and ill-advised.”