ATLANTA-New Postal Service regulations and recently passed legislation are likely to increase credit union mailing costs in the very near future.
In early January, the USPS implemented two different penalties on mailings that do not adhere to the Move Update requirements it put into place last fall. The requirements mandate that mail owners examine their addresses and compare them to the NCOA (National Change Of Address) database to ensure that discounted mail does not use old addresses. Old addresses are classified as those where a change of address form has been filed more than 90 days prior to the mailing. The new penalties result in a charge of seven cents per piece of non-compliant mail.
"The fines associated with the requirements are two-fold. First, the US Postal Inspection Service has the ability to assess fines on businesses that they determine do not adhere by these newly-implemented requirements. The amounts of the fines are assessed on a case-by-case basis and can be substantial because of the agency's ability to look at past records," DATAMATX CEO Harry Stephens explained. "The other method... [uses] a random, representative sample of the discounted postage rate mailing is checked to ensure that at least 70% of the addresses, with a change of address on file older than 95 days, have been updated with the new address. If not, the percentage of discounted pieces of mail in the mailing below 70% is assessed at $0.07 per piece charge."
How to Avoid Fines
Credit unions can avoid these fines altogether by sending all mail by first class postage, as that class of mail is exempt. While that would ensure 100% compliance, Stephens said such a solution would be the "most costly" option.
"Another resolution you could implement, which would cost less money upfront, would be to estimate the amount of man hours necessary to develop manual or IT systems and procedures to ensure you properly update your mailing lists as necessary when you receive returned mail pieces or reports from your print and mail suppliers," he told Credit Union Journal. "It is important to work with your print and mail vendor to ensure you are using an NCOALink process to update any addresses as necessary prior to mailing. If you are unable to update the addresses, you should mail those pieces at the full first class postage rate to avoid a fee if the piece does not meet the new requirements."
The soon to be effective CARD Act will also raise mailing costs, though there is little CUs can do to mitigate the legislation's impact. The requirement that all card issuers display terms, conditions and other information with each statement will "drastically inflate the size, and therefore price of each statement," Stephens pointed out.
