Terry J. Jorde, the senior executive vice president of the Independent Community Bankers of America, recently said that a proposal to provide small-dollar loans through the U.S. Postal Service “throws good money after bad.”
In January, the USPS inspector general proposed providing non-bank financial services to the underbanked in a plan the IG said could bring in nearly $9 billion in revenue.
The proposal received support from Sen. Elizabeth Warren (D-Mass.), who is widely credited with the creation of the CFPB. She said it would serve customers without access to bank services and allow the postal service to “shore up its own financial footing,” The Huffington Post reports.
Jorde said, however, the plan is “yet another taxpayer-funded rescue for a too-big-to-fail institution.”
“Because the agency has long since exhausted its $15 billion borrowing authority and cannot borrow another dime from U.S. taxpayers, it is in desperate need of new sources of revenue,” Jorde said in “The Ohio Community Banker,” a publication of the Community Bankers Association of Ohio. “But if the Postal Service can’t efficiently operate its primary business, why should we expect it to have any success in the banking sector?”
Jorde said the proposal would expose the cash-strapped agency to even greater potential losses and taxpayers to “additional subsidies and financial rescues down the road.”
“Washington has been known to put good money after bad, and this is a classic case,” Jorde said. “Surely we have learned by now that you can’t put out a firestorm with gasoline. Turning mail carriers into bank tellers and further inserting the federal government into our personal finances would not ward off insolvency at the Postal Service. In fact, it would only put taxpayers at greater risk.”