To folks at the U.S. postal service, the phrase "too big to fail" might as well refer to an oversized package that's marked for urgent delivery, and a "stress test" could be what happens to customers waiting in long lines to buy stamps.
In other words, there's a big gap between the world David Williams occupies every day as the Postal Service inspector general and the realm he entered in January, when his office released a paper arguing that the agency should start making small-dollar consumer loans and offering new ways for consumers to save.
"The paper received a lot of attention," Williams acknowledges with a bit of his characteristic Midwestern understatement.
The report's ideas set off a financial media firestorm and were just as loudly panned by banking lobbyists as they were cheered by prominent congressional Democrats. Postmaster General Patrick Donahoe had telephoned Cam Fine, head of the Independent Community Bankers of America, to reassure him that the ideas in the report did not come from the Postal Service itself.
Though the IG's an independent agency, "I think sometimes people are under the mistaken notion that they do the Postal Service's bidding," Donahoe says. "They do a lot of good work for us. This is one we didn't ask for.... It came [as] a little bit of a surprise to us when we saw it."
Williams, who has served as inspector general of five federal agencies, including the Nuclear Regulatory Commission, the Treasury Department and the Social Security Administration, cites two main reasons for his office's interest in adding new financial services at the post office.
One is the Postal Service's financial condition, which has improved of late but can still best be described as shaky. The other is the fact that 38% of the nation's post offices are in ZIP codes with no banks, and another 21% are in ZIP codes with only one bank. "It does seem odd that so many people lack these kinds of basic services," Williams says.
He defends his office's proposal as an alternative to payday lending, which he sees as bad for America, and suggests that the Postal Service could be a partner, not a rival, to banks that want to reach underserved communities.
"Banks have left many areas of the United States. They've pulled back and closed their branches. They obviously didn't do that for any mean-spirited reason. They did it because they weren't able to pay the overhead and make it work. And the same has been true for the Postal Service," Williams says.
The IG's report proposes selling reloadable prepaid cards — linked, perhaps, to direct deposit and online bill pay. If consumers paid an average of $15 per month in fees to use the cards, that would generate $1.2 billion in annual revenue, the report estimates. It also proposes that the agency make small-dollar loans, which the report suggests could come with far lower interest rates than payday lenders charge and still be a profitable business line.
In the two months since the report was released, the IG's office has met several times with congressional committees and with officials from the Postal Service.
Williams, the agency's IG for the past 11 years, says he has come away from the meetings with the understanding that while the Postal Service has a full plate of other concerns right now, there is interest in seeing the proposals considered eventually.
But the postmaster general doesn't sound quite so optimistic about the proposals' chances.
"It would be interesting to see if the IG continues to work on this, to flesh that discussion out a little bit more, but from our perspective, it's something that is not in our wheelhouse," Donahoe says.
"The banking services, it's an interesting idea. I think that the concern that we have is that there's a lot more work that needs to be done here."
Congress, which over the years has tightened restrictions on the Postal Service's ability to offer non-postal services, holds a lot of the cards in this debate, but it appears unlikely to act anytime soon. One Democratic congressional staffer says that a postal reform bill probably won't pass until the Postal Service's financial situation worsens again.
Williams' current seven-year term as IG ends in 2017, and his office is well-insulated from the political blowback its proposal has sparked. So he doesn't seem likely to be cowed by those in the banking industry who object to what they see as an audacious expansion of the Postal Service's role in the economy.
"We haven't made a decision as to whether to do a follow-on report," Williams says, "but it wouldn't be unusual for us to explore the idea more deeply, particularly given the amount of feedback we've received on it."