WASHINGTON (1/22/16)--Ensuring laws and regulations do not hinder consumer access to credit unions would do far more to serve the unbanked and underbanked than banking at the U.S. Postal Service (USPS), Credit Union National Association (CUNA) President/CEO Jim Nussle said Thursday.
In a letter for the record for the Senate Committee on Homeland and Governmental Affairs hearing on postal banking, Nussle said credit unions are well positioned to serve the underserved but face obstacles.
“Credit unions face several barriers that keep them from doing more to serve the underserved ... credit unions have been subject to more than 200 regulatory changes since 2008. Most of these have been in response to the financial crisis that credit unions neither created nor contributed to,” Nussle wrote.
“Every dollar we spend complying with new regulations is a dollar that is not put to use in the service of credit union members. That is why we have been encouraging Congress and the regulators to look for ways to reduce credit union regulatory burden to free up resources to provide additional services to members,” he added.
The hearing was conducted to assess the reality of the postal service's financial situation. In 2014, the USPS Office of the Inspector General released a white paper suggesting that the postal service is well positioned to provide certain financial services to Americans who are underserved or unserved by the mainstream financial services sector.
While CUNA agrees that more could be done to help the 70 million underserved or unserved consumers, it is skeptical that postal banking is the solution.
“Before there is any consideration of proposals to expand the mandate of the postal service to include provision of financial services, we strongly encourage Congress to explore how the Federal Credit Union Act and other banking laws constrain credit unions’ ability to do more to serve the underserved, and work to expand consumer access to mainstream financial services through institutions established for that purpose,” Nussle wrote.
Instead, CUNA asked Congress to give more consumers access to credit unions by looking more broadly at credit union field-of-membership restrictions, such as allowing federal credit unions to add an underserved area to its field of membership.