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WASHINGTON, D.C – A change in procedures at the U.S. Post Office has brought credit unions an economic opportunity, but it is unclear how many will be able to take advantage of it or will want to. The opportunity is to provide depository services to local U.S. Post Offices. The U.S. Postal Service divides the U.S. up into eight regions and each region submits a Request for Proposals (RFP) for financial institutions that wish to accept the cash and checks that a local post office takes in during a given day. Up until this year, these RFPs have only been advertised in the American Banker newspaper and have been worded in a way that made it seem that only banks need apply for the business, according to Robert Spindler, executive director of the National Council of Postal Credit Unions. “Essentially, the advertisement had a line to the effect that only financial institutions which are insured by the FDIC need apply, and that effectively kept credit unions out,” Spindler said. Spindler said that he had been told that some credit unions in California had gotten wind of this and had pressed the Postal Service for a clarification. At which point the Postal Service realized its mistake and changed the requirements to read that the financial institution only has to be federally insured. A postal service official confirmed Spindler’s account but would not do so for the record, citing Postal Service procedures for talking to newspapers. But Mary Dunn, CUNA’s associate general counsel pointed out that while the requirement that the financial institutions be insured by FDIC has been done away with, the postal service still only advertises the RFP in the American Banker. “I guess we will just keep our eye out for the RFPs, and when we see one, forward it to the league so that all their credit unions have a chance to bid on it,” she said. While the opportunity is quite large, it is unclear how many credit unions will bid or whether and if the postal service credit unions will have an edge in the competitive process, Spindler said. For example, an RFP that is open now and will close on January 10 2003 covers 6,546 post offices, according to CUNA, in nine states Delaware, Kentucky, North Carolina, Ohio, Pennsylvania, South Carolina, West Virginia, portions of New Jersey and Virginia. The contracts are initially for three years, with the Postal Service having an option to renew them five times for one year. But the requirements that the postal service are likely to have in the RFP are probably very specific and it’s unclear how many credit unions are going to be ready to tender a winning bid. “I don’t know how many will want to deal with that much cash,” Spindler said, pointing out that the postal business will have a lot of cash and that “cash is expensive to have to deal with.” He also said there may be additional security or paperwork procedures involved with the contracts. CUNA reported that the RFP that is open already required that winning financial institutions obtain an armored car service to pick up the cash and checks from the post offices in the service area and that the financial institution be able to wire the funds to the USPS account each day. It is also unclear how many credit unions are even aware of the opportunity yet. The $1.2 billion Atlanta Postal Credit Union would seem to be a likely bidder but Dianne Yost, president for marketing at the credit union said that she did had no knowledge of the opportunity and could not say whether the credit union intended to bid when it had the chance. [email protected]

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