Post office cutbacks could affect CUs marginally
WASHINGTON (3/3/10)--Mounting costs and dwindling business this year have the U.S. Postal Service pushing for changes in delivery schedules and prices. Some of the changes--if implemented--would result in credit unions adjusting their operations and members adjusting their expectations.
The Postal Service is facing an estimated $238 billion in losses in the next 10 years. Last fiscal year it experienced a 13% decrease in mail volume--more than double any previous decline. Last year alone the service lost $3.8 billion. Postmaster General John E. Potter is seeking changes such as an end to Saturday deliveries, longer delivery time for letters and packages, and increases in the prices of postage stamps (The Washington Post March 2).
The changes aren't a done deal. According to a statement from the post office obtained by Dupaco Community CU, Dubuque, Iowa, the proposals made to legislators have not moved on, and there is nothing definite. Still, News Now asked credit unions how such changes would impact them.
Dupaco Community CU, which had $777.8 million assets at the end of 2009, has 55,000 members, said Tami Rechtenbach, director of member service delivery at the credit union.
She addressed the issue of losing Saturday delivery first. "Saturday's not a big day for outgoing mail for us. We mail from 2,100 to 2,400 pieces of mail every day on Monday through Friday. On Saturday, we mail only 10 or 15 pieces," Rechtenbach told News Now. "So from a processing point, not much would be changing."
Most of the credit union's branches are open 8:30 a.m. to 12:30 p.m. on Saturday. A branch open Saturday and Sunday in a store does its processing on regular business days anyway, she said.
However, skipping a day of delivery on the weekend means it will take at least a day longer for mail to get to a member.
One option is to go electronic. Dupaco Community has a "very robust and very popular" online banking program, with online statements. "We do try to get people to use electronic delivery on statements, but a lot of folks stand by their paper statements," Rechtenbach said.
"Those with certified CD notices and certificate maturities who are expecting a check will want the same service," even though the check may take four days to arrive instead of the next day.
"We can push electronic payment as a quicker delivery method," she said, "especially to those who want their checks right away." "We'll have to pay attention to deadlines and adjust placing the mail accordingly," she said. "We would have to make sure we've allowed time to enable members to receive it."
ORNL FCU, Oak Ridge, Tenn., doesn't see much impact from the proposed changes in terms of budget or delivery.
"Over all, I don't think it will affect us too much," said Nancy J. Ballard, public relations director at ORNL FCU, Oak Ridge, Tenn. "If the changes go through as planned, we would just make adjustments as needed. For example, with our members, we have been encouraging the shift to electronic services such as e-Statements, Web Bill Pay, and newsletters online, for quite some time," she told News Now.
Delays in direct mail marketing pieces may be delayed if mail service isn't available or if layoffs at the postal service affect the speed of delivery.
"If we see a delay in delivery of an item, then we may adjust our editing and printing deadlines to accommodate a timely arrival of our news or promotional pieces." Ballard did not envision having problems with third party vendors because of the proposed delays. "We have very good relationships with our third party vendors and would be able together to avoid any bumps in the road," she said.
"With our budget, we usually do a good job of predicting what we will spend. If costs are over our projections, we have ways to adjust," Ballard added.