Postal Banking Is Unlikely to Improve USPS Finances: GAO

Allowing the Postal Service (USPS) to offer unrelated services, such as banking, is unlikely to improve the service’s financial condition and could require significant technology investments and employee training, the Government Accountability Office said in a report released Tuesday.

“Given such concerns, USPS and policy makers need to carefully weigh costs, benefits and limitations of any new offerings,” the GAO said.

Postal unions and some Democrats, most notably Democratic presidential candidate Sen. Bernie Sanders (D-N.Y.), have said that post offices should provide some banking services as a way to help reach people with limited access to traditional financial services.

Several years ago, the USPS Inspector General also raised the issue. The IG in 2015 estimated that the USPS could generate $1.1 billion annually by expanding the financial products it offers. The GAO said considering the cost involved, the services would generate $100 million to $200 million in net revenue.

The GAO also said while offering additional non-postal products at post offices could provide consumer, government or community benefits, “viability may be limited.”

The GAO said some other countries offer banking at post offices, but that USPS and banking associations interviewed pointed out that other nations have vastly different regulatory structures. In addition, it said, some foreign postal operators are selling their banks or have a model that includes relatively lower post staff.