Nobody Is Using Postal Banking Pilot

The program had no customers for at least the past four quarters

Do you remember the U.S. Postal Service pilot program that financial services trade groups warned was the first step toward postal banking?

No?

You’re not alone. Despite all of the dire predictions when the plan was first announced in 2021, nobody is using the pilot program.

Literally, nobody. During the first quarter of FY24, which included the holiday season, no one purchased a single-use gift card using a payroll or business check at any of the four post offices that have been testing the program, according to records released by the USPS this month.

In Sep. 2021, the USPS launched the program at four locations: Falls Church, Va., Baltimore, Md., the Bronx, N.Y., and Washington, D.C. At the time, USPS officials denied that the pilot program was the first step toward allowing post offices to provide basic banking services.

That, however, did not satisfy critics. House and Senate Republicans attacked the pilot program, arguing that federal law prohibits the USPS from providing banking services without congressional approval.

Dan Berger, then-president/CEO of the National Association of Federally-Insured Credit Unions, agreed, saying in April 2022, "This program stretches the bounds of the postal service’s statutory authority and allows the underfunded and understaffed USPS to unfairly compete with credit unions who are already meeting the needs of low- to moderate-income individuals.”

Supporters of allowing the USPS to provide expanded banking services also were not satisfied, saying that the service was doing nothing to publicize the pilot program.

In May 2023, a group of progressive organizations, including Americans for Financial Reform, the Save the Post Office Coalition, and Take on Wall Street, issued a report criticizing the pilot program and calling for allowing post offices to offer a host of banking services.

“The program is too limited in scope, only allowing individuals to cash payroll checks under $500,” the groups said. They added that if the pilot was intended to test whether the Postal Service could serve unbanked people, the USPS chose the wrong sites, since several do not match the characteristics of unbanked communities.

They added, “The Post Office is an ideal place to offer a public banking option, thanks to its trained workforce, public interest mission, high level of public trust, and over 30,000 locations in communities across the country.”

For its part, the USPS remains noncommittal about the future of the pilot, continually stating in quarterly reports that “No determinations for future plans have been made since the previous update.”