NAFCU pushes back against USPS check-cashing pilot program
NAFCU President and CEO Dan Berger Monday expressed concerns with the U.S. Postal Service's (USPS) check-cashing pilot program - which quietly launched Sept. 13 – and allows customers to use payroll or business checks to purchase single-use gift cards of up to $500 at post office locations in four cities.
"NAFCU urges policymakers to take steps to end the USPS’ pilot program offering paycheck-cashing services to consumers. Last week, USPS informed American consumers that it cannot manage its current mission of delivering mail on time," said Berger. "Now, it has come to light that USPS is quietly expanding its reach into financial services without providing much clarity on how it plans to balance its current duties alongside this new undertaking.
"This program stretches the bounds of the postal service’s statutory authority and allows the underfunded and understaffed USPS to unfairly compete with credit unions who are already meeting the needs of low- to moderate-income individuals," added Berger. "To better help the underbanked and underserved, Congress should instead allow all credit unions, as community-based financial institutions that prioritize consumers over generating profits, the ability to add underserved areas to their fields of memberships. The USPS already has its hands full with its current mission and lacks the bandwidth needed to run such a large and complex operation.”
In addition, NAFCU Vice President of Legislative Affairs Brad Thaler wrote to both the Senate Banking Committee and House Financial Services Committee Tuesday to further outline the industry's issues with the expansion of financial services and postal banking by the USPS.
In the letter, Thaler explained that, although NAFCU strongly supports the important core work of the USPS and is committed to identifying long-term solutions to ensure an efficient, self-sustaining, and affordable U.S. postal system, postal banking is not one of those solutions.
“An expanded foray into financial services would both go beyond the USPS's purpose and powers and add responsibilities in which the USPS has no expertise and does not currently have the infrastructure and capacity to manage," wrote Thaler.
Thaler explained that the association and its member credit unions are concerned that "allowing the USPS to expand into additional financial services will raise a number of serious regulatory and consumer protection questions and present significant competitive issues for private sector entities."
“If Congress would like to expand access to financial services, we urge you to consider other steps, such as the draft legislation to allow all credit unions to add underserved communities to their fields of membership that has been proposed in the House Financial Services Committee,”
added Thaler. " This would be one way to help provide additional access to regulated financial services for those in underserved communities, while not creating costly new programs with uncertain effectiveness and impact."
Read Thaler's full letter. NAFCU will continue to reiterate the industry's concerns regarding the USPS's pilot program – in addition to any postal banking-related proposals - and provide updates on this issue via NAFCU Today.
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