Plenty! First of all, what is the federal government doing competing with private enterprise in the delivery of financial services, such as installment loans? Secondly, this quasi-governmental agency– the United States Postal Service–has not sustained a profit in years. When it is in dire straights, it calls upon taxpayers to bail it out…or since it is somewhat a monopoly, it raises its prices without too much worry about competition. But, it seems that UPS and Federal Express might are competitors after all. And that is the real story.
Why are UPS and Federal Express turning a profit, while the USPS is not? There are a variety of reasons—but no matter which one or ones is correct, the same problems that plague the USPS as a deliverer of mail will plague the Postal Service as a deliverer of loans.
The Inspector General of the USPS has issued a “white paper” suggesting that as banks have shuttered branches in certain communities, the Postal Service is uniquely suited to fill the “vacuum.” The Inspector General speculates that having the USPS fill such void is a better result than having Americans rely upon those businesses which continue to serve such areas–which includes an array of traditional consumer finance companies. Competing for business with an entity that can call on the U.S. Treasury if it gets into trouble is seriously troublesome for those who still value capitalism and free enterprise.
The OIG suggests several alternatives to the USPS becoming a financial institution outright. Their four alternative suggestions and the one alternative to return to the “Postal Saving System” (that actually existed between 1911 and 1967) all require an analysis of the “relative revenue, relative costs and benefits” to the underserved and the “operational complexity.” The OIG speculates that the USPS could earn billions of dollars in the banking business.
Some cynics suggest that the United States taxpayer is more likely to be bailing out the Postal Service to the tune of billions of dollars.
To our knowledge, the CFPB has not yet weighed in on this concept.