CBA Opposes Allowing Post Office To Operate Consumer Banking Services
WASHINGTON – Consumer Bankers Association President and CEO Richard Hunt sent a letter to the House Committee on Appropriations yesterday, opposing the “Postal Non-Banking Financial Services Modernization Pilot Program” included in the fiscal year 2022 Appropriations Act.
Recognizing market participants in the well-regulated, well-supervised banking system already provide expertise and services in a manner the U.S. Postal Service would find difficult, Hunt wrote in the letter:
“Effectively and safely providing these services requires an institution to have decades of experience in risk management, regulatory compliance, consumer protection, and privacy protection – areas the U.S. Postal Service has little to no knowledge.”
Instead of establishing a large, duplicative and potentially expensive banking infrastructure to create bank accounts through postal banking, Hunt also stated:
“A more effective and efficient approach to help expand consumer access to traditional banking services is to enhance the ability of banks to innovate. […]Advances in innovation of financial services will drive financial access and promote inclusion for those who struggle finding mainstream financial services.”
Last month, the Consumer Bankers Association, The Clearing House, the American Bankers Association, the Credit Union National Association, the Mid-Sized Bank Coalition of America, and the National Bankers Association released recommendations policymakers should consider for expanding financial inclusion and helping bank the unbanked, rather than promoting the entrance of a government-subsidized entity that would threaten the safety and competitiveness of the consumer financial market.
Read the recommendations here. Read the full letter here and below.
June 28, 2021
The Honorable Rosa L. DeLauro
Chair
House Committee on Appropriations
2000 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Kay Granger
Ranking Member
House Committee on Appropriations
2000 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Mike Quigley
Chair
Sub. Financial Services and General Government
2000 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Steve Womack
Ranking Member
Sub. Financial Services and General Government
2000 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairs DeLauro and Quigley and Ranking Members Granger and Womack:
On behalf of the Consumer Bankers Association (CBA), I write in opposition to the “Postal Non-Banking Financial Services Modernization Pilot Program” included in the fiscal year 2022 Appropriations Act for Financial Services and General Government. CBA is the voice of the retail banking industry whose products and services provide access to credit for millions of consumers and small businesses. Our members operate in all 50 states, serve more than 150 million Americans and collectively hold two-thirds of the country’s total depository assets.
CBA strongly opposes allowing the U.S. Post Office to offer consumer banking services. The American financial system is a well-regulated, highly complex marketplace that operates under free market principles. CBA members have the expertise and capacity to serve customers’ needs in a way the post office would find difficult. Effectively and safely providing these services requires an institution to have decades of experience in risk management, regulatory compliance, consumer protection, and privacy protection – areas the U.S. Postal Service has little to no knowledge. Additionally, the entrance of a government-subsidized entity into the
consumer financial market would not only affect the competitiveness of the nation’s thousands of financial institutions currently serving consumers and small businesses but would also expose American taxpayers to financial risk.
A more effective and efficient approach to help expand consumer access to traditional banking services is to enhance the ability of banks to innovate. Every day banks continue to develop and leverage the latest technologies to provide products and services that meet the diverse needs of the U.S. consumer. Improvement in the delivery of safe and innovative products and services has the potential to serve many Americans that are underserved. Advances in innovation of financial services will drive financial access and promote inclusion for those who struggle finding mainstream financial services.
On behalf of CBA’s members, I strongly urge you to reject any postal banking proposal to the FY 2022 Financial Services and General Government appropriations bill.
Sincerely,
Richard Hunt
President and CEO
Consumer Bankers Association
About the Consumer Bankers Association:
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.
