Postal Banking Pilot Still Has No Customers

Nobody used the program during the second quarter of 2024

Any way you look at it, the United States Postal Service’s pilot program to allow consumers to cash a business or payroll check in exchange for a gift card has been a flop.

Continuing a trend, during the second quarter of FY24 nobody used the program at the four locations testing it, according to a USPS report issued last week. Nobody used the program during the first quarter of FY24 either.

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.

The Postal Regulatory Commission has required the USPS to file quarterly reports on how many consumers have used the program and whether the postal service plans to expand it. “No determinations for future plans have been made since the previous update submitted in February,” the USPS said in its report last week.

Currently, the USPS is not permitted to provide banking services. Democratic members of Congress have consistently introduced legislation to authorize the USPS to provide banking services. Progressive groups, as well as postal unions, have supported that legislation. Financial services trade groups consistently have opposed it.

America’s Credit Unions renewed its opposition last month, when the Senate Homeland and Governmental Affairs Committee held an oversight hearing focused on the USPS. “An expanded foray into financial services would both go beyond the USPS’s purpose and powers and add responsibilities in which the USPS has no expertise and does not currently have the infrastructure and capacity to manage,” Jim Nussle, the trade group’s president/CEO, wrote in a letter to committee members.

Nussle wrote that providing banking services is not an efficient use of the USPS’s time and resources, adding that experience has shown that postal banking does not provide significant consumer benefits. He wrote that allowing the USPS to expand into additional financial services will raise several serious regulatory and consumer protection issues. “Postal banking is not one of the solutions to the current issues facing the USPS, nor is it a viable solution for providing financial services to historically underserved communities,” he wrote.

Nussle renewed his call for enactment of legislation that would allow all credit unions to add underserved areas to their fields of membership. “This would be one way to help provide additional access to regulated financial services for those in underserved communities while not creating costly new programs with uncertain effectiveness and impact,” he wrote.