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Luetkemeyer calls USPS banking program “direct violation” of PAEA
Representative Blaine Luetkemeyer, R-Mo., the Ranking Member of the House Financial Services Subcommittee on Consumer Protection and Financial Institutions, wrote to Postal Regulatory Commission (PRC) Chairman Michael Kubayanda Tuesday, stating 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).
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.
“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 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.”
NAFCU has long opposed the proposal saying that, although the association 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.
“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," said NAFCU President and CEO Dan 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.”
Luetkemeyer is not the only Congress member who has fervently opposed the postal banking pilot program; Senators John Boozman, R-Ark. Pat Toomey, R-Pa., Tommy Tuberville, R-Ala., John Thune R-S.D., Mike Crapo R-Idaho, have also expressed major concerns with the proposal in a NAFCU-supported letter.
NAFCU will continue to reiterate the industry's concerns regarding the pilot program – in addition to any postal banking-related proposals – and provide updates on this issue via NAFCU Today.
Luetkemeyer is not the only Congress member who has fervently opposed the postal banking pilot program; Senators John Boozman, R-Ark. Pat Toomey, R-Pa., Tommy Tuberville, R-Ala., John Thune R-S.D., Mike Crapo R-Idaho, have also expressed major concerns with the proposal in a NAFCU-supported letter.
NAFCU will continue to reiterate the industry's concerns regarding the pilot program – in addition to any postal banking-related proposals – and provide updates on this issue via NAFCU Today.