The publication is reproduced in full below:
LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AGRICULTURE, RURAL
DEVELOPMENT, ENERGY AND WATER DEVELOPMENT, FINANCIAL SERVICES AND
GENERAL GOVERNMENT, INTERIOR, ENVIRONMENT, MILITARY CONSTRUCTION,
VETERANS AFFAIRS, TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT
APPROPRIATIONS ACT, 2022
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speech of
HON. PATRICK T. McHENRY
of north carolina
in the house of representatives
Tuesday, July 27, 2021
Mr. McHENRY. Madam Speaker, I rise in strong opposition to the $6 million appropriated in Division D of this bill that will be used to carry out postal banking pilot projects across the country. Let's be clear, implementing postal banking is one of progressives' top priorities.
In 2018, the previous Administration created a special task force to specifically review the Post Office and identify necessary reforms. The Treasury Department was directed to release the Task Force's recommendations, which it did in its report, ``United States Postal Service: A Sustainable Path Forward.''
The Task Force's recommendations were clear: ``given the USPS's narrow expertise and capital limitations, USPS should not pursue expanding into new sectors, such as postal banking, the USPS does not have a demonstrated competency or comparative advantage, or where balance sheet risk would be added.''
The Post Office agreed. In response to a widely criticized and highly unusual report by the United States Postal Service Office of Inspector General (OIG), the Post Office made clear that despite any recommendations to the contrary from the OIG, the Post Office core mission ``is delivery, not banking.'' Postmaster General DeJoy reiterated this position earlier this year.
The Task Force said no. The Post Office said no. Yet progressives want it.
Why? Postal banking is one step closer to overhauling our banking system. It's one step closer to creating a public bank option. It's one step closer to the federal government knowing everything about a consumer's financial history--from each credit card transaction to each deposit and withdrawal. Big brother will be watching you.
Not to mention this would stifle private sector innovation by banks and fintech firms that have already shown promise for reaching underbanked and rural consumers.
Progressives argue postal banking is needed to address the decreasing number of bank branches and the rise in the number of people without access to a checking account or short-term credit. Democrats automatically believe that means that the government should provide these banking services, including through the Post Office.
What Democrats fail to acknowledge is branch closures and consolidations result from overly burdensome government regulation. It can't be solved with more government.
Postal banking has been tried before. From 1911 to 1967, the United States had the ``Postal Savings System,'' run by the USPS' predecessor. The system provided savings accounts with interest rates set by the USPS and funds deposited in national banks near depositors post office. The system failed. Postal banking couldn't compete with private sector banking institutions. It did not have the flexibility to meet the needs of customers.
Private sector financial institutions are highly regulated and operate competitively and flexibly in a market-based system. The ensures consumers' demands for financial products and services are met, and they receive the best pricing for them.
Postal banking is harmful to the financial system and ultimately harmful to consumers. It will crowd out private sector financial innovation and ultimately fail to reach the very underserved communities Democrats claim they want to reach.
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SOURCE: Congressional Record Vol. 167, No. 132
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
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