Adding convenient, low-cost banking services to post offices looked to be dead. Here’s why the picture has changed
Though the promising concept of postal banking has frustratingly stalled due to inertia from policymakers, this week things started to move. Rep. Darrell Issa, chairman of the House Oversight Committee, which oversees the Postal Service, previously called postal banking “unacceptable” and a “massive expansion” of government power. But now, the Senate Homeland Security and Government Affairs Committee, after months of inaction, finally held hearings for four nominees to the Postal Service Board of Governors, which operates as a board of directors for the agency, hiring the postmaster general and setting agency policy.
For most of the Obama administration through to today, Republicans held a majority on this board thanks to multiple vacancies. But confirming these nominees would equalize the representation at four Democrats and four Republicans (the president still needs to nominate a replacement for an additional vacant seat, which would give Democrats the majority). This would put the pieces in place that could make postal banking a reality.
The hearings were a sleepy affair – only committee chairman Tom Carper, D-Del., bothered to show up (Tom Coburn, the ranking Republican, couldn’t make it due to a delayed flight). And the questions were less than probing. But Democratic nominee Vicki Kennedy – Ted’s widow – did say in her prepared remarks that “I think it also important to look at the possibility of expanding into related business lines,” and that the post office needed the “regulatory flexibility to take advantage of opportunity and innovate when it is in the public interest.” Postal banking serves that capacity perfectly – the one in four American households with little or no access to financial services need a convenient, cheap banking option, so they don’t continue to get gouged by alternatives like payday lenders and check-cashing stores.
Another Democratic nominee, Stephen Crawford, cited the inspector general report on postal banking directly during questioning. “We see a lot of foreign postal services make some money on that,” Crawford correctly pointed out. “Whether it makes sense for the Postal Service to get into that is a huge question, the issue, though, is to have the opportunity to experiment … If I were on the board, that’s an area I would give special attention to.” While not a ringing endorsement, Crawford did acknowledge the importance of a pilot program, the first potential board member to explicitly do so.
Even more momentum comes today from a full-day conference in Washington on postal banking, organized by the Pew Charitable Trusts.Speakers include Sen. Elizabeth Warren, Issa and Postal Service Inspector General David Williams. At the conference, Pew delivered the results of two studies on postal banking: one surveying public attitudes about the concept, and another looking at the geographic distribution of banks and post offices, to assess whether postal banking would offer additional convenience. Salon got a sneak peek, and both studies carry positive news for supporters, albeit with some caveats.