As credit unions wait with bated breath for a Senate vote on raising the MBL cap, the chamber will likely first address changes to the United States Postal Service that could impact credit union budgets and compliance.
CUNA Senior Vice President of Legislative Affairs Ryan Donovan said one possible change to the USPS could be the reduction in delivery service from six days a week to five.
“There has been some concern that might impact credit unions in terms of having to send things to borrowers or members within a certain amount of time,” the CUNA lobbyist said, adding “but most would expect corresponding changes in regulatory requirements.”
Another impact would be new laws that make it easier for the USPS to raise postage rates, affecting credit union budgets for mailing statements and other required notices to members, as well as putting another nail into the direct mail marketing coffin. However, Donovan said technology like e-statements will make that less of an issue.
Ron Daly, president/CEO of e-marketing firm DigitalMailer, said his 12-year-old company always sees a spike in e-statement business with each postal rate hike. The Herndon, Va.-based DigitalMailer currently counts 180 credit union clients.
When a member converts from paper to e-statements, it saves the credit union approximately 50 cents per statement, Daly said. New information regarding debit card transactions, disclosures and other additional information is driving up the weight of paper statements, which added to postage costs, he said.
Credit unions are increasingly communicating with members via electronic means, he said, particularly when the financial institutions interact with young members. Daly said his 23-year-old daughter doesn’t provide any home mailing address contact information when she purchases products or services, and she has no land line phone at home.
“There’s a whole new generation out there that says, ‘I want electronic communication or nothing at all’,” he said.
However, Daly said he doesn’t think paper statements will go the way of the dinosaur anytime soon.
“It’s like we’ve been hearing that checks will go away, and they haven’t,” he said.
CUNA Chief Economist Bill Hampel said postage is a fixed budget item for credit unions, and postage hikes have not historically been a big issue. The trade association was not able to quantify the financial impact a rate hike would have on credit unions by deadline.