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.
According to the side letter, Japan has agreed to regulate its postal insurance company as a financial-services firm, like private-sector competitors. Simchak argued that previously, only the Ministry of Internal Affairs and Communications had regulated Japan Post Insurance, allowing the entity to introduce new products without subjecting them to the same strict standards that private firms must meet.
And Japan will also allow private firms to contract with the post office to sell their products alongside policies issued by Japan Post Insurance. For example, American Family Life Assurance Co. now sells cancer insurance in some Japanese post offices.
That firm, more commonly known as Aflac, is huge in Japan. Aflac derives no less than 74 percent of its global revenue from Japanese customers -- $16.6 billion in 2014 -- and insures no less than one in four Japanese households, according to the company. (Cancer insurance policies are the firm's mainstay there. Cancer is feared and stigmatized in Japanese culture, and many people there want to insure themselves against the disease, as Matt Phillips explains in an essay at Quartz. Aflac did not respond to a request for comment on Thursday.)
The move comes as Japan's post office is being privatized, including the insurance company, the bank and the mail service itself. In an initial public offering on Wednesday, investors purchased about 11 percent of the post office's equity, bidding shares 26 percent above the offered price.
Japan's parliament voted to sell the post office in 2005, when Obama was still a senator and years before negotiations began on the Trans-Pacific Partnership. The publication of the text of the agreement and the initial public offering were coincidental.
Still, both suggest that Japanese policymakers believe the post office should be subject to market forces.
"When you create anti-competitive distortions in markets through the special treatment of government-owned insurers, it not only hurts private insurers, it also hurts the consumers and the policyholders," Simchak said.
Mehrsa Baradaran, a legal scholar at the University of Georgia who has long advocated for postal banking in the United States, said the reforms in the Trans-Pacific Partnership seemed reasonable. Post offices can and should compete on equal terms with the private sector when they offer financial services, she argued, saying that the public sector can offer insurance more cheaply and efficiently.
"With insurance and with banking, it's about trust and size," she said. "That's why the post has an advantage, because it reaches a lot more people, and because there's an inherent trust in the post."
Private alternatives to postal insurance are often "more expensive for the consumer, and possibly not as good of a product," she added. "You don't underprice insurance by being the disrupter who offers it cheap and fast."
If private insurers disagree, at least they'll have the opportunity to prove themselves in Japan.