WASHINGTON—The USPS pilot program offering paycheck-cashing services has not been approved by the PRC and is in direct violation of the Postal Accountability & Enhancement Act (PAEA), according to a letter to the Postal Regulatory Commission from Rep. Blaine Luetkemeyer (R-MO).
The pilot program – which quietly launched in September – 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. As CUToday.info reported earlier, several months into the pilot fewer than a half-dozen people had used the service.
“The Postal Service’s attempt to offer a financial services product without proper approval from the PRC raises questions as to the intentions of USPS leadership and the PRC’s authority to conduct oversight of the Postal Service’s product lines,” stated Luetkemeyer, the ranking member of the House Financial Services Subcommittee on Consumer Protection and Financial Institutions. “The notion that USPS could engage in this pilot program by justifying it as a new payment option—as opposed to a new product—is an affront to the PRC’s statutory role.”
‘Stretches the Bounds’
Added NAFCU President and CEO Dan Berger, “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. 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.”
Luetkemeyer is not the only Congress member who has opposed the postal banking pilot program; Senators John Boozman (R-AK), Pat Toomey (R-PA), Tommy Tuberville, (R-AL), John Thune (R-SD) and Mike Crapo (R-ID) have also expressed major concerns with the proposal.