The sloppy, capricious and arbitrary manner in which the Postal Service has made and implemented those regulations have harmed small businesses and customers of those businesses alike. But the Postal Service not only is exempt from all taxes and most regulations to which its private competitors are subject, it is exempt from most federal regulations to which other federal agencies are subject. For example, it is not subject to Title 5, Chapter 7 of the U.S. Code which grants citizens an appeals process for actions that are “arbitrary and capricious.” The new regulations on CMRAs illustrate why the Postal Service, a government monopoly with regulatory powers that it can use against its competitors, at minimum, should be made subject to the Paperwork Reduction Act, Regulatory Flexibility Act, the Results Act, and other federal statutes meant to protect citizens against abuses by government agencies, and why the new regulations on private mail boxes should be repealed immediately.
When the government uses its power to restrict the freedom of citizens or to impose upon them financial burdens, it must make the case why this is absolutely necessary for the protection of the lives, liberties and property of the citizens. The burden of proof is on the peoples’ servant, the government. The Postal Service has failed in its responsibility to make the case for the new regulations on private mail boxes. Let us review the Postal Services actions.
Ignoring the Public Will
The Postal Service has ignored the will of the people concerning the new regulations. It opened its initial mandatory thirty‐day comment period on those regulations on August 26, 1997. It also held an additional thirty‐day comment period from November 24, 1997 to December 24, 1997.
There were 8,107 comments registered. All except ten opposed those regulations. Further, it appears that some of those positive letters were in fact solicited by the Postal Service. Yet despite the overwhelming opposition to the proposed regulations, the Postal Service decided to implement them anyway.
Failure to Demonstrate the Magnitude of the Problem.
The Postal Service has failed to demonstrate the magnitude of the problem it seeks to alleviate through its regulations. It maintains that those regulations on private mail boxes are meant to deal with problems of mail fraud. While this is a legitimate concern, the USPS did not establish the nature and magnitude of the problem. Such a demonstration is necessary if the Postal Service is to show the compelling public interest that requires its actions. If no such interest exists, the regulations are unnecessary.
A November, 1998 Inspector General report found that between October, 1997 and September, 1998 there were 9,642 convictions for mail‐related crimes. Of those, the largest number, 3,874 or 40.2 percent were for mail theft by non‐employees of a business, e.g. thieves stealing from home mail boxes. The next largest number, 1,672 or 17.3 percent were for sending illegal substances, mainly illegal drugs, through the mails. Some 1,533 of cases, or 15.9 percent, involved mail fraud. The Inspector General did not report how many of those cases involved the use of private, CMRA mail boxes as opposed to homes and office boxes, or PO boxes. The Postal Service has failed to supply this information, but it seems that the new regulations are meant to deal with about 1,500 cases annually at most.
Failure to Show How the Regulations Will Solve the Problem.
The Postal Service has failed to show exactly how its new regulations will deal with the mail fraud problem, or how much of the problem the regulations will eliminate. For example, it maintains that eliminating the use of the address designation “suite” or “apartment” for mail that goes to private mail boxes will reduce mail fraud. But what studies does the Postal Service have indicating how many cases of mail fraud involve unscrupulous individuals using private mail boxes with the “suite” or “apartment” designation? The Postal Service cannot even define the magnitude of the problem. Thus it is difficult for it to show how effective its new regulations might be.
Failure to Balance Costs and Benefits.
Because it has failed to show the magnitude of the problem, the Postal Service has not examined what the costs of its new regulations might be, and whether those costs in fact outweigh the benefits, that is, whether it is using a cannon to kill a fly.
Figures by Rick Merritt, published by the Cato Institute, find that the costs in changing addresses on stationary and business cards, the time wasted by CMRA managers and customers alike in trying to figure out what the new regulations mean and to comply with them, as well as other expenses could be $1 billion. If, say, two‐third of the 1,500 mail fraud convictions each year involve private mail boxes, that works out to $1 million to prevent each case. Is that too costly? Maybe no; probably yes. But because the Postal Service did not conduct a cost‐benefit analysis, we do not know what the burden of regulations will be.
Failure to Consider Alternative Approaches.
The Paperwork Reduction Act wisely requires that government agencies, when making regulations, consider which regulations are least costly and intrusive for small businesses. Unfortunately, the Postal Service is not covered by this Act and thus is free to act with reckless disregard for the effects of its regulations on smaller private enterprise or to consider alternative approaches to dealing with problems such as mail fraud.
For example, USPS maintains that the use of the designation “Suite” or “Apartment” in an address on mail is going to a private mail box helps facilitates mail fraud and, thus, the new regulations would ban such designations. But many CMRAs are no longer allowing new customers to use such designations. In other words, the market in part seems to be taking care of this problem. Further, those individuals who have had private mail boxes for some years and have used the “Suite” or “Apartment” designation are not likely to be the quick hit‐and‐run con artists misuse private boxes to defraud others. In addition, large credit card companies and other such enterprises that might be in doubt about an address can consult a currently available data base that will tell them whether an address is a CMRA. Finally, CMRA operators do not want their boxes used for fraud, and, thus, perhaps better education by local postmasters of CMRA managers, done in a spirit of cooperation rather than confrontation, would help head off mail fraud.
All of these points taken together suggest 1) that the current regulations are not necessary, 2) that the Postal Service merely needs to take up the last‐mentioned education task, and 3) that this approach might take care of 90 percent of the fraud problem. Yet this minimalist approach, which would be the least intrusive to small businesspersons either operating CMRAs or using CMRA boxes, was not considered.
Postal officials might argue that a minimalist approach is not 100 percent full‐proof. That is true. But the Postal Service has not shown that its approach is perfect either. Further, it is typical of government bureaucrats to argue that in the name of perfection, of dealing with that final 5–10 percent of a problem, that extreme measures are necessary. This is the kind of discussion that should go on in the cost‐benefit analysis stage of the regulation‐making process. Unfortunately, the Postal Service is exempt from this process.
Reckless Disregard of Privacy.
The USPS posted in the Federal Register on March 25, 1999 its intention to impose the new CMRA regulations. It stated that as of June 24th, all CMRA operators had to collect from their customers filled‐out copies of the new Form 1583, with copies of two forms of identification, one a photo ID. Customers were asked on that form if they planned to use their boxes for doing business with the public. The Postal Service instructed CMRA operators that “information required to complete this form may be available to the public if ‘Yes’ in block 5, Form 1583 is checked.” This includes home addresses and phone numbers. In other words, CMRA business customers might have personal information made available to the public.
But release of such information seems to violate the Postal Service’s own regulations. Title 39 of the Code of Federal Regulations concerning privacy establishes that
(b)(1) … The Postal Service will not disseminate information about an individual … unless:
(i) The individual to whom the record pertains has requested in writing that the information be disseminated, or
(ii) It has obtained the prior written consent of the individual to whom the record pertains. (p. 130)
This disregard for privacy generated political opposition to the new regulations. For example, women who use private boxes for business purposes might find unstable ex‐husbands or stalkers obtaining home addresses through the new regulations. The National Coalition Against Domestic Violence, a group dedicated to helping women who face such threats, in a June 15th “Action Alert,” announced that “The impact for domestic violence victims is potentially fatal.” The Alert added that “These unnecessary regulations make it more difficult for a battered woman to effectively use a commercial postal box to keep her location confidential.”
Making Up Regulations on the Fly.
The Postal Service seemed to be making up its new regulations on the fly. For example, it seemed to have recognized that it did not in fact have the authority to release private customer information that it was asserting it had in Form 1583 and that its new regulations violated its own privacy regulations. This is seen in the fact that on June 9, 1999 in the Federal Register, the USPS posts its intention to change Title 39, U.S. Code, Part 265, the prohibition “against disclosure of information in PS Form 1583.” The Federal Register entry reads that: