Allowing the U.S. Postal Service to expand into the financial service industry would be “unacceptable” and a “massive expansion” of the government power, a key lawmaker said Friday.
As an executive branch agency, Rep. Darryl Issa, R-Calif., said any expansion of the Postal Service’s ability to generate revenue from non-postal methods poses “serious fair competition” concerns.
“Currently, the Postal Service pays no federal, state, or local taxes, is exempt from most state and local laws, and is implicitly backed by the taxpayer in the event of bankruptcy,” Issa said in a statement. “With these inherent advantages over the private sector, allowing USPS to expand into broad new arenas, such as the financial service industry, would be unacceptable and represent a massive expansion of the power of government.”
Issa’s comment comes a day after FoxNews.com published a report on a 27-page white paper distributed last month by the Postal Service’s inspector general discussed getting into an array of financial services as a means of keeping the money-losing mail operation afloat. Payday loans, check cashing and digital currency exchanges were among the possibilities outlined in the Jan. 27 report.
“The Office of Inspector General is not suggesting that the Postal Service become a bank or openly compete with banks,” the paper’s executive summary reads. “To the contrary, we are suggesting that the Postal Service could greatly complement banks’ offerings.”
But the debate over whether to offer nonpostal services, according to Issa, is a “distraction” from the agency’s primary challenge – decreasing reliance on mail as a whole.
“Rather than trying to find a new mission for an oversized agency, the goal should be to rightsize the agency to adjust to diminishing demand,” Issa’s statement continued. “There is no guarantee USPS will make a profit in any nonpostal endeavor and gambling on a massive expansion of USPS’s mission to support unnecessary infrastructure is irresponsible.”
Issa, chairman of the House Oversight Committee, which has jurisdiction over the Postal Service, said H.R. 2748 would strengthen the statutory prohibition on nonpostal, nongovernmental activity that was put in place under the Postal Accountability and Enhancement Act of 2006. If passed, the bill would create a new regulatory framework requiring any new nonpostal activity to be specifically authorized by Congress to eliminate any possible ambiguity under current law.
Two days after the white paper was published, the Postal Service’s inspector general held an invitation-only seminar in Virginia to discuss virtual currencies such as Bitcoin, as well as the potential benefits and disruptive effects they may have on traditional payment networks. But officials insisted to FoxNews.com on Thursday that the Postal Service isn’t entering the world of virtual currency — or peer-to-peer payment systems not subject to regulation — just yet.
“It is purely coincidental that the OIG hosted an invitation-only seminar to discuss virtual currencies into an electronic form of payment shortly after the white paper’s release,” according to clarification provided to FoxNews.com from the U.S. Postal Service Office of the Inspector General. “ … The USPS OIG did not present and does not have a position or recommendation on virtual currency.”
Banking industry officials told FoxNews.com that the agency that suffered a net loss of $5 billion in fiscal year 2013 — the 7th consecutive year in the red — should instead stick to delivering envelopes and parcels and stay out of financial services.
“There’s an old phrase: Do few things and do them well,” said Bill Himpler, executive vice president of the American Financial Services Association. “The Postal Service has its hands full trying to stay above water in trying to accomplish its current mission. I would hate to see taxpayers on the hook for a half-baked venture like this.”
The “specific opportunities” listed in the document include reloadable prepaid cards to encourage people to save money and could also include new ways of transferring money — both internationally and domestically — and even small loans.
“As society becomes increasingly cashless, the Postal Service’s ability to provide a physical link to the new digital economy will become more and more vital,” the white paper reads.