For a flat fee of $5.95, customers can purchase a single-use gift card of up to $500, using business or payroll checks as payment. USPS won’t accept checks larger than $500, and won’t disburse cash for any checks.
Four post office locations are currently participating in the pilot in Washington; Baltimore; Falls Church, Virginia and the Bronx, New York.
The agency already offers some basic financial services, including money orders, electronic funds transfers and cashing checks issued by the Treasury Department, but would need legislation to take on more robust services at its more than 34,000 retail locations.
The Congressional Research Service found USPS offered some financial products in the 20th century, but they haven’t been available since the agency terminated the Postal Savings System in 1967.
While progressive Democrats have introduced legislation in recent years that would expand banking services at USPS, House and Senate Republicans have dismissed these proposals, saying they go beyond the agency’s core mission of delivering mail and packages.
Top Republicans on the House Oversight and Financial Services Committees, in a letter to Postmaster General Louis DeJoy on Wednesday, expressed frustration with USPS for prolonging an “unsuccessful” pilot program.
House Oversight and Reform Committee Ranking James Comer (R-Ky.), House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.) and Consumer Protection and Financial Institutions Subcommittee Ranking Member Blaine Luetkemeyer (R-Mo.)
Lawmakers said the pilot violated legal restrictions on USPS offering or developing new products outside the scope of its traditional postal services, and that USPS launched the program without approval from Congress or the PRC.
“The program violated long-standing prohibitions that prevent USPS from offering or developing new non-postal products, and over the course of four months, it proved extremely unpopular. It is therefore unclear why, and on what basis, the program has been extended,” they wrote.
The lawmakers also pointed to the pilot’s lack of customers as evidence that the program “was not designed in response to customer demand.”
“The failure of the pilot program demonstrates that consumers are not interested in banking with the federal government, including USPS,” the lawmakers wrote.
President Joe Biden recently signed into law the Postal Service Reform Act, which specifies postal services to include “the delivery of letters, printed matter, or mailable packages, including acceptance, collection, sorting, transportation or other functions ancillary thereto.”
The lawmakers told DeJoy this definition of postal services in the legislation “exists to ensure USPS focuses on its unique role and does not focus on novel non-postal products and services that could limit private market development, including the market for financial services.”
PRC Chairman Michael Kubayanda, in a March 9 letter to House Republicans, said the commission has been “actively engaged” with USPS in providing oversight and providing details about the pilot program.