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CBAI Opposes Postal Service Banking Proposal

In a July 13, 2018 comment letter to the U.S. Department of the Treasury, the Community Bankers Association of Illinois (CBAI) stated its opposition to a proposal that is again being revisited in Congress and elsewhere for the United States Postal Service to provide banking services.

The disadvantage of the Postal Service delivering these services is that it will require developing and installing an entire infrastructure and expertise for its employees to be qualified to deliver banking services. The business of banking involves considerable risks, but the Postal Service possesses none of the required risk-management expertise for delivering banking services. Developing and installing this infrastructure and expertise will involve a massive up-front effort and financial investment which will divert the Postal Service’s focus away from its primary mission of delivering the mail and successfully addressing its own financial issues, which include annual losses and billions in unfunded liabilities.

Community banks have developed expertise in delivering traditional banking services. Rather than recreating and implementing a government-directed postal-banking system, it makes more sense to encourage and support existing community banks which have been successfully delivering market-driven banking services across the country for well over a century. CBAI recommended the various stakeholders work cooperatively to find ways to enhance the ability of community banks to expand the delivery of banking services in a safe and sound manner. Read Letter.