USPS – This statement is in response to the numerous public appeals from politicians, unions and other entities calling for the Postal Service to move to provide banking services.

The Postal Service’s mission is to provide the American public with trusted, affordable, universal mail service. Our core function is delivery, not banking.  Our resources are limited, and we are focused on investing in innovations within that core function, in order to grow volume and revenue where possible, and provide additional contribution towards covering the costs of our universal retail, processing, and delivery network.

While we appreciate the OIG’s research and the interest of politicians and our unions and are open to discussion, there are a number of issues that must be considered as part of any dialogue:

• Focusing on growing our core business has shown strong results, as demonstrated most clearly by our exponential package growth in recent years. This strategy is superior to implementing recommendations that we create a financial services group to pursue endeavors that are legally uncertain under current law and present unproven fiscal benefits to the organization.
• For the Postal Service to provide the broad range of financial services called for would ultimately require consideration by Congress. If Congress addresses this issue, it must set forth a realistic framework for how those services are to be developed and financed, so that they can achieve Congress’s goals without negatively affecting the Postal Service’s core universal service mission of delivering mail to almost every address in the nation.
• With the Postal Service’s current cost structure, retail clerks in Post Offices would be providing these financial services. These employees receive wages and benefits that greatly exceed those provided by employees of the existing participants in the financial services market thereby limiting the potential for the Postal Service to charge below-market rates in a profitable fashion.
• The assertion that the Postal Service could enter this market, take market share from more established commercial firms already active in this industry, and make a profit in as little as five years is curious. How could the Postal Service generate meaningful profit margins offering risky services like check cashing or loans?  Research shows profit margins on these financial services businesses across the industry are very low (about 10-20 percent).

The Postal Service provides certain financial services appropriate to our existing infrastructure including money orders, electronic funds transfers, and US Treasury check cashing to meet customer needs. To the extent our research concludes that we can legally provide additional services at a profit and without distracting from our core business, we would consider these.  However, public policy and regulatory discussions that consider the important concerns addressed in this document must be addressed before the Postal Service invests in an area outside our core function.