House Republican Wants to Ensure Postal Banking Plan Stays Dead
One official said, “While the concept for postal banking is nothing new, it’s still a terrible idea.”
A senior House Republican is asking Treasury Secretary Steven Mnuchin to ensure that any changes to the postal system explicitly prohibit postal banking.
“While the concept for postal banking is nothing new, it’s still a terrible idea,” Rep. Patrick McHenry (R-N.C.), vice chairman of the House Financial Services Committee, said, in a letter to Mnuchin. McHenry quoted a Brookings Institution student that found that postal banking would create a subsidy that taxpayers would have to absorb.
Sen. Kirsten Gillibrand (D-N.Y) has introduced legislation to allow the postal service to offer consumer banking services. At the same time, President Trump has established a task force to examine the entire postal service.
McHenry said that process should not result in an expansion of postal services.
Credit union trade groups have said credit unions are perfectly positioned to offer the services that postal banks would offer.
McHenry said that during the past few years, the Postal Service has suffered a data breach and was audited for having insufficient controls to stop the use of money orders in money launderings schemes.
“Putting Americans’ hard-earned money at risk at an agency with that kind of track record would be a recipe for disaster,” he wrote.
McHenry said he is concerned that the Postal Service and the American Postal Workers Union agreed to establish a joint task force to modernize and expand money transfers.
He added that Congress has made it clear that the Postal Service is prohibited from offering new, nonpostal services.
“In other words, any attempts by the Postal Service to expand or enhance its banking services are well beyond the scope of its statutory authority,” McHenry wrote.