The article ‘Postal Banking Is a “Great Idea’: Bernie Sanders’ published Oct. 21 online by Credit Union Journal is yet another example of efforts by elected officials in Washington to have government encroach upon the activities of private enterprise.
The idea to allow post offices to become depository institutions and compete with licensed and regulated entities is unsound and fails to be a realistic approach to bolster the finances of the U.S. Postal System (USPS).
The USPS is in the business of delivering mail and packages. If it is believed the financial ills of the USPS is a result of those services not being provided effectively and efficiently, that is an issue Congress should address. Congress should hold hearings and ask the Post Master General why the USPS continues to struggle and how he, the CEO of the agency, proposes to correct the situation. Perhaps sound, updated management practices will help “reinvigorate” the system as Sen. Sanders wishes.
In addition, his criticisms of existing depository institutions, lenders and check-cashing operations are not accurate or fair. There are thousands of credit unions across the country serving the underserved and providing financial services to millions of low-income individuals.
Check cashers and payday lenders are already regulated by both the states and federal governments. If consumers are getting “ripped off,” to use the senator’s words, then perhaps the Consumer Financial Protection Bureau (CFPB) and others are not doing their jobs.
For many years check cashers have been licensed and regulated by the states in which they do business. The CFPB is also studying the industry to see how they can join in. In addition, the fee check cashers charge is set by their regulators or state legislatures.
Lenders who provide short-term loans to almost 14 million people a year are also heavily regulated and have maximum rates they can charge. If they stop making loans, who does the senator believe will take their place? Surely it’s not the USPS.
There are already sufficient laws and regulations addressing consumer issues and abuses that may occur in the financial services industry; additional ones are not needed.
When there exists within the free enterprise system a business that already provides the services consumers need, why should government attempt to duplicate and operate it?
Michael E. Fryzel is an attorney in Chicago and a former NCUA Chairman.
