The post office isn’t just where you go to buy stamps in many countries. It’s also a bank and an insurance company. Proponents say that postal banking gives people worldwide a reliable way to save and manage their money without costly fees or scams, and that the U.S. Postal Service should offer financial services again — as it did up until 1967.
In fact, Sen. Bernie Sanders (I-Vt.), the candidate for the Democratic presidential nomination, has injected this argument into the presidential debate. “I think that the Postal Service, in fact, can play an important role in providing modest types of banking service to folks who need it,” he said recently.
But, at least internationally, the Obama administration apparently has some concerns about post offices that provide financial services.
On Thursday, the text of a major trade deal known as the Trans-Pacific Partnership was released, confirming that the administration has negotiated limits on what post offices can do in the financial space.
More precisely, the agreement seeks to curtail what global insurance companies describe as the unfair advantages granted to post offices by governments worldwide. A side letter specifically names Japan Post, which offers insurance products and other financial services to consumers. Insurance is a lucrative business in an aging nation of 127 million people, and Japan Post Insurance earned roughly $50 billion in premiums last year.
“This is an issue that a lot of insurance company and insurance organizations in the U.S. and in other markets have been concerned about for a long time,” said Steve Simchak, the director of international affairs at the American Insurance Association. The group represents property and casualty insurers.
“We’re pleased that the TPP creates a framework for reining in the special privileges that post offices that sell and underwrite insurance have enjoyed,” he added.