WASHINGTON–In a letter to United States Postal Service (USPS) Postmaster General Louis Dejoy, Sen. John Boozman (R-AR), Senate Homeland Security and Governmental Affairs Ranking Member Sen. Rob Portman (R-OH), Senate Banking Committee Ranking Member Sen. Pat Toomey (R-PA), as well as Sens. Tommy Tuberville (R-AL), John Thune (R-SD), Mike Crapo (R-IDA) expressed “major concerns” with the USPS pilot program offering paycheck-cashing services.
Separately, CU-supported legislation that would make it easier to expel members has passed out of a House committee.
The USPS pilot program, which launched Sept. 13 in four markets, 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 noted it supports the position taken by the senators in the letter, as does the DCUC.
“This untested program raises serious questions about whether these activities waste taxpayer resources without any commensurate benefit,” wrote the Congress members. “We are concerned that the pilot program exceeds the Postal Service’s legal authority and fails to comply with relevant regulations and procedural requirements.”
Information Requested
The authors also requested the following information from the USPS by Dec. 3:
- The statutory authority that permits the USPS to implement such a pilot program
- The oversight federal and state financial regulators have over the Postal Service in relation to the pilot program and in offering these products
- Future plans for expanding the pilot program as well as any other non-bank financial services products and offerings
- How the USPS plans to ensure full compliance to statutory and legal requirements regarding any future expansion of non-bank financial services.
Long Opposition
NAFCU noted it has long advocated against the pilot program, cautioning that the program would “go beyond the purpose and powers of the USPS and add responsibilities in which the USPS has no expertise and does not currently have the infrastructure and capacity to manage.”
DCUC Reacts To Letter
The Defense Credit Union Council (DCUC), which said it also continues to propose credit unions as the right solution to support a USPS banking program, reacted to the letter from Boozman.
“Sorry to say, but the Postal Service got ahead of themselves on this,” said DCUC President and CEO Anthony Hernandez. “DCUC will continue to remind Congress and the administration that if they want to expand access to financial services, and have it done right, they should turn to defense credit unions. We have the knowledge and expertise and we’re always ready to serve.”
CUGMA Passes Out of Committee
Separately, the House Financial Services Committee has voted to advance the Credit Union Governance Modernization Act (CUGMA). The legislation, which has the backing of the credit union trade groups, would modernize the Federal Credit Union (FCU) Act’s provisions related to member expulsion in order to keep credit unions, their members, and staff safe from illicit behavior. The bill now advances to the full House of Representatives for consideration.
“NAFCU applauds the House Financial Services Committee for advancing the Credit Union Governance Modernization Act and taking yet another positive step toward ensuring credit unions, their members, and staff are kept safe from harmful and subversive behavior," said NAFCU Vice President of Legislative Affairs Brad Thaler. "This bill will establish better protections for credit unions dealing with members who engage in unlawful behavior by providing clearer expulsion regulations. NAFCU has consistently offered support for the advancement of this bill and essential reforms for the credit union expulsion process and we look forward to working with Congress to finalize this legislation."