Postal commission indicates banking pilot violated law

Feb. 02, 2022

The Postal Regulatory Commission is pressing the U.S. Postal Service on why it didn’t seek the commission’s approval before launching an ICBA-opposed postal banking pilot program last year.

Legal Questions: In a series of questions to the USPS last week, the PRC cited federal law requiring the USPS to get the commission’s approval for any “market test” for an experimental product. The PRC—which previously said it did not review or approve the pilot—noted the USPS itself referred to the pilot as a “time-limited test.”

Pilot Outlook: The PRC also asked the USPS how it plans to proceed with the banking pilot given it has attracted only six customers, whether the USPS plans to continue or expand the pilot, and whether it promoted the program at its four participating locations.

Low Demand: The Postal Service previously reported to the PRC that the pilot resulted in just six sales between Sept. 13 and Jan. 12 that have provided a total value of $548.46 in gift cards and brought in $35.70 in fees to USPS.

Background: The program offers check cashing, bill paying, ATM access, and expanded money orders and wire transfers at locations in Washington, D.C.; Falls Church, Va.; Baltimore; and the Bronx, N.Y. Customers may cash payroll or business checks to buy single-use gift cards worth up to $500 for a $5.95 fee.

ICBA Position: ICBA—which has spoken out against the pilot via NBC News, The Washington Post, and the Washington Examiner—strongly opposes postal banking. A three-part series of ICBA issue briefs delivered to policymakers last year explores the policy’s flaws and offers alternatives for reaching the unbanked.