FOM changes could advance financial inclusion more than postal banking
Congress should explore ways to leverage the credit union system to bring about greater and more equitable financial inclusion, including field of membership updates, CUNA wrote to the House Oversight and Reform Committee Wednesday. The committee conducted a hearing discussing proposals to put the U.S. Postal Service on sustainable financial footing.
“Credit unions adamantly support and are diligently working towards the goal of expanding banking access, but we have grave reservations about proposals to leverage the United States Postal Service (USPS) to provide banking services well beyond the Postal Service’s core competencies,” the letter reads. “Adding another complex layer to the already hampered capacity of the USPS, raises a number of serious regulatory and consumer protection questions, and could leave consumers less protected than they would be at a regulated financial institution.”
CUNA notes that credit unions have a financial infrastructure already in place, as well as a long history of serving communities.
“Credit unions could proudly and swiftly offer banking services to all -- if they were not limited by archaic field of membership restrictions,” the letter reads. “While credit unions already offer affordable products as well as broad access to banking services through their Shared Branching Network, they are constrained to only accept new members that qualify under a common bond – like their employer or geographic location. Stated more bluntly, credit unions are currently required to refuse banking services to many underbanked individuals and underserved communities who are not in their field of membership.”
CUNA has consistently called on Congress to leverage credit unions in place of any sort of postal banking, most recently in an op-ed from CUNA Chief Advocacy Officer Ryan Donovan published last year in American Banker.