The government agency that proposed a controversial expansion by the U.S. Postal Service into financial services now acknowledges that its big ideas would probably require the passage of new legislation.
In a report released Thursday, the postal inspector general's office concluded that the mail carrier's hands are likely tied by current law with respect to deposit products and small-dollar loans. A 2014 report from the same office highlighted those products as having the potential both to generate significant revenue for the postal service and to benefit underserved Americans.
Still, the postal inspector general is not giving up on the vision of Americans going to the post office for a wider range of financial products.
"Because it has a presence in every neighborhood, including many places where there are no longer any bank branches, the Postal Service is well suited to provide such services," the follow-up report states.
The new report also concludes that the Postal Service might be able to take certain limited steps to expand its presence in consumer financial services. Those moves include putting more marketing muscle behind its existing money order business, expanding its check cashing and international remittance services, offering domestic money transfers, and leasing out space in post offices for ATMs.
Such changes would likely not require congressional approval, but they would have to be approved by the Postal Regulatory Commission, according to the report.
"Although regulatory approval would have to be received before going forward, this approach could generate $1.1 billion in annual revenue after 5 years, while covering costs and contributing profits," the report states.
The inspector general's report also explores possible approaches for the Postal Service to take if Congress grants it expanded authority to offer financial products.
Those options are: working with one key partner in the financial services arena; using different partners for each financial product the post office decides to offer; establishing a marketplace where private firms could offer their financial products to consumers; or becoming a licensed bank.
The inspector general's 2014 report hit strong resistance from many in the financial services industry, but it was greeted more warmly by consumer groups, Democratic Sen. Elizabeth Warren and even some bankers.