July 31, 2020

NAFCU, trades urge Congress to oppose postal banking proposal

cap domeNAFCU Thursday joined with eight other financial services trade groups to oppose the inclusion of a proposed amendment that would create a postal banking pilot program in the fiscal year 2021 Financial Services and General Government (FSGG) bill.

The opposed-amendment was added to the bill by a voice vote Thursday afternoon.

NAFCU has long advocated against postal banking proposals and holds that credit unions already offer loan products and savings mechanisms for their members. The association argues that consumers are best served by institutions that can offer a full range of financial services and develop relationships with their members.

"Although we appreciate—and strongly support—efforts to increase financial inclusion across the country, we are deeply concerned that allowing the U.S. Postal Service (USPS) to provide banking services will be beyond the Postal Service’s core competencies, will raise a number of serious regulatory and consumer protection questions, and could leave consumers less protected than they would be at a regulated financial institution," wrote the trade groups.

In the letter sent to House leadership, the groups noted that postal banking would not address the USPS' core financial challenges, and instead could make them worse, pointing to written statements from the Treasury Department and the postal service.

Additionally, the trades urged Congress to address postal reform efforts by enacting legislation that would "reduce costs and increase efficiencies to put the U.S. Postal Service on a sound and sustainable financial path over the long run."

Earlier this week, NAFCU Vice President of Legislative Affairs Brad Thaler also wrote to House leadership expressing NAFCU's opposition to the amendment.

“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 that the postal service has no expertise in,” wrote Thaler. 

NAFCU will continue to monitor the bill as it progresses through Congress and advocate for credit union priorities. The House is expected to vote on the larger appropriations measure today and send the package to the Senate, where the Senate is likely to draft its own funding bill.