The nation's 300 postal credit unions have long prepared for the U.S. Postal Service to close post offices and processing centers but the reality of staying viable after that happens is about to deliver the real challenge.
That was the assessment this week from leaders of the National Council of Postal Credit Unions, who advise their colleagues to pursue new SEGs and seek offsite branches. Some shutdowns are expected to begin as soon as May.
“We've seen the big drop in U.S. Postal volume for a couple of years now and retirement of employees and how it has made it so hard for small credit unions to grow,” said John King, chairman of the NCPCU and president/CEO of the $44 million Eagle One FCU of Philadelphia.
Industry sources said there may be as many as 30 small credit unions housed in Postal Service offices that would face ouster once their facilities are closed.
“One thing we did was to set up a branch in Delaware so we would be protected against closings,” said King, recalling Eagle One's opening of a Claymont office following the 2001 anthrax scare.
That calamity forced the shutdown of a post office credit union in a federal building for months “and we don't want that again,” said King.
Will Yarborough, past chairman of the NCPCU and president/CEO of the $200 million U.S. Postal Service FCU of Clinton, Md., said apart from the closure prospect a major problem for small credit unions, including postals, remains finding loans when the consumer trend is “to shed debt not add to it.”
That adds to the challenge, Yarborough said, adding that small and mid-size CUs are now operating in a fierce competitive environment marked by “overbanked” areas like those in Maryland and metro D.C.
Both Yarborough and King said small postal CUs will need to think creatively “and with new energy” about how they can add new SEGs to replace the loss of USPS business.
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