[Congressional Record Volume 168, Number 120 (Wednesday, July 20, 2022)]
[Extensions of Remarks]
[Pages E760-E761]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES 
                        APPROPRIATIONS ACT, 2023

                                 ______
                                 

                               speech of

                        HON. PATRICK T. McHENRY

                           of north carolina

                    in the house of representatives

                         Tuesday, July 19, 2022

  Mr. McHENRY. Mr. Chair, the report accompanying the FSGG 
appropriations bill includes ``an increase of $6 million above the 
budget request for USPS to carry out pilot programs to modernize its 
current postal banking services, including surcharge-free automated 
teller machines, wire transfers, check cashing, and bill payment.''
  This ``Postal Non-banking Financial Services Modernization Pilot 
Program'' is yet another attempt by progressives in Congress to expand 
the U.S. Postal Service's core mission into the financial system. This 
concept is ultimately harmful to American consumers because it will 
crowd out private sector financial innovation to reach underserved 
communities.
  That's why Rep. Luetkemeyer and I offered an amendment to prohibit 
funding in this bill from being used to carry out the Postal Non-
banking Financial Services Modernization Pilot Program. Unfortunately, 
our amendment was not made in order to the bill we're considering 
today.
  Democrats have long called for USPS to be able to offer consumer 
banking services such as checking and savings accounts and extensions 
of credit to consumers and small businesses. These functions are beyond 
the Post Office's core competencies, will subject taxpayers to 
potential losses, will undermine the private sector's ability to 
compete with taxpayer-subsidized banking services, and pose a threat to 
consumers' privacy when it comes to financial data.
  In 2018, the previous Administration created a special task force to 
specifically review the Post Office and identify necessary reforms. The 
Treasury Department was directed to release the Task Force's 
recommendations, which it did in its report, ``United States Postal 
Service: A Sustainable Path Forward.'' The Task Force's recommendations 
were clear: ``given the USPS's narrow expertise and capital 
limitations, USPS should not pursue expanding into new sectors, such as 
postal banking, the USPS does not have a demonstrated competency or 
comparative advantage, or where balance sheet risk would be added.''
  Moreover, the Post Office agreed. In response to a widely criticized 
and highly unusual report by the United States Postal Service Office of 
Inspector General (OIG), the Post Office made clear that despite any 
recommendations to the contrary from the OIG, the Post Office's core 
mission ``is delivery, not banking.'' Postmaster General DeJoy 
reiterated this position.
  Progressives argue postal banking is needed to address the decreasing 
number of bank branches and the rise in the number of people without 
access to a checking account or short-term credit. Democrats 
automatically believe that means that the government should provide 
these banking services, including through the Post Office. What 
Democrats fail to acknowledge is financial institution branch closures 
and consolidations result from overly burdensome government regulation, 
which won't be reconciled using more government.
  Postal banking has been tried before. From 1911 to 1967, the United 
States had the ``Postal Savings System,'' run by the USPS' predecessor. 
The system provided savings accounts with interest rates set by the 
USPS and funds deposited in national banks near depositors' post 
offices. The system failed. Postal banking couldn't compete with 
private sector banking institutions. It did not have the flexibility to 
meet the needs of customers.
  Moreover, American consumers demonstrated recently that they are not 
interested in banking with the USPS. Just last year, the USPS took it 
upon itself to create a pilot program to offer check cashing services 
in the form of gift cards. According to documents submitted to the 
Postal Regulatory Commission, only six gift cards were issued under the 
pilot program and total fee revenue was $35.70. The failure of the 
pilot program demonstrates the fact that it was not designed in 
response to customer demand and that consumers are not interested in 
banking with the federal government, including USPS.
  Private sector financial institutions are highly regulated and 
operate competitively and flexibly in a market-based system. The 
ensures

[[Page E761]]

consumers' demands for innovative financial products and services are 
met, and they receive the best pricing for them. Congress should not 
stifle private sector innovation by financial institutions and fintech 
firms that have already shown promise for reaching underbanked and 
rural consumers.
  The USPS should remain focused on its core mission. The fact that 
only six people used the postal banking pilot confirms that consumers 
remain supportive of the free market and look to private firms for 
technological solutions to meet their banking needs.
  Postal banking is harmful to the financial system and ultimately 
harmful to consumers. It will crowd out private sector financial 
innovation and ultimately fail to reach the very underserved 
communities Democrats claim they want to reach.
  The USPS should remain focused on its core mission, not creeping into 
the provision of consumer financial services.

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