CUs could increase services by changing ‘archaic’ FOM restrictions

March 11, 2021

Credit unions support and are working towards the goal of expanding banking access, but CUNA has “grave reservations” about proposals to leverage the United States Postal Service (USPS) to provide banking services, CUNA wrote to the House Appropriations Subcommittee on Financial Services and General Government Wednesday. The subcommittee conducted its annual hearing on USPS oversight.

“Adding another complex layer to the already hampered capacity of the USPS, raises several serious regulatory and consumer protection questions, and could leave consumers less protected than they would be at a regulated financial institution,” the letter reads. “As such, we urge Congress to explore ways to leverage the credit union system to bring about greater and more equitable financial inclusion.”

CUNA adds that credit unions could “proudly and swiftly offer banking services to all,” if they were not limited by “archaic” field of membership restrictions.

“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,” the letter reads. “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.”