March 11, 2021

NAFCU pushes back on postal banking, offers ways for CUs to help consumers

Capitol HillAhead of a House Appropriations subcommittee oversight hearing today on the U.S. Postal Service (USPS), NAFCU's Brad Thaler reiterated the association's concerns with postal banking and argued credit unions are well positioned to achieve the goals of such proposals.

"The USPS was established to provide letter, parcel and package delivery services to the country, and an expanded foray into financial services would be both beyond these powers and add a responsibility in which the postal service has no expertise," wrote Thaler, NAFCU's vice president of legislative affairs. "In fact, both the U.S. Treasury and USPS itself have both issued statements discouraging the notion of postal banking being an efficient use of time or resources. "

Thaler recommended that instead of pursuing postal banking, which could also raise regulatory and consumer protection concerns, Congress allow all credit unions to add underserved communities to their fields of membership.

"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," Thaler concluded.

Relatedly, Thaler made the ask for credit unions to serve more underserved areas in a letter sent to the House Financial Services Subcommittee on Consumer Protection and Financial Institutions ahead of its hearing today on policy options to help consumers amid the coronavirus pandemic.

"Too many Americans are unbanked, underbanked or underserved by financial institutions, and do not have the access that they need to financial services," Thaler wrote. "Credit unions stand ready to help with financial literacy education and access to loans and other financial products, but many are limited in their ability to add underserved areas to their fields of membership.

"Allowing all credit unions to add underserved areas to their fields of membership is one way to help those who need it most have access to capital without burdening the federal government," he added.

Thaler also reiterated the association's call to provide credit unions with additional tools and flexibility to better meet their members' financial needs, including:

  • relief under the member business lending (MBL) cap, which was introduced in the House last week;
  • extending credit unions' loan maturity limits under the Federal Credit Union Act; and
  • modernizing the E-SIGN Act.

Additionally, Thaler again cautioned against some efforts that could hinder credit unions' abilities to serve their members, including changes to interchange fees, legislatively mandated blanket loan forbearance, overbroad restrictions on first-party debt collection, the elimination of courtesy pay programs, and major changes to bankruptcy provisions.

NAFCU will continue to advocate for policies that allow credit unions to better serve their 124 million members and more Americans in need of safe, affordable financial services.