ABA Banking Journal - August 2008 - (Page 7) briefing I f you barcode your outgoing mail, or have it done for you by a presort house, you will be affected by a sweeping U.S. Postal Service initiative. Known as the Intelligent Mail barcode program, it takes effect, in part, May 2009. To fully implement the program, large mailers will have to invest considerable time and capital to comply with the directive. If they don’t, they will lose their automation (presort) discounts, in part or in total. Considering that banking represents one of the largest mailer classes, and that individual large banks are significant mail originators, discounts of as much as nine cents per piece, on a million pieces of mail, add up. That’s one reason why Bank of America, among the biggest bank mail originators, entered into a negotiated service agreement with the Postal Service, effective this April. The bank confirmed that the NSA is the equivalent of implementing the Full Service option of the USPS Intelligent Mail barcode. (There is also a Basic option requiring less investment, but garnering smaller discounts. Both are described further on.) INSIDE BRIEFING Snapshot: Residential loan growth trends . . p. 8 Fed-bound: Former ABA Chairman Duke moves in p. 9 Website preview: Fair-Value Accounting: Not fit for banks . . . . . . . . . . . . . . . . . . . . . . . . . p. 9 “Then & Now,” a yearlong review of banking history during ABA Banking Journal’s 100th Anniversary. This month: “What came out of the N.H. woods in 1944” . . . . . . . . . . . . . . . . . p. 10 Banks could win, or lose, with barcode mandate be viewed by other mailers as being discriminatory. That observation proved to be prescient when Capital One filed a complaint June 19 with the Postal Regulatory Commission claiming that the USPS declined to give it the same terms BofA got. Capital One said the Postal Service based the Bank of America NSA on out-of-date industry baseline data, not on actual and measurable improvements in the bank’s own read/accept rates. Further, the complaint said that the USPS is unwilling to do the same for other mailers, requiring them to use “mailer-specific baselines,” which Capital One maintains is discriminatory and illegal under various statutes. The USPS disputes these allegations and some others in a 15page response to the complaint filed July 21. It also filed a motion to dismiss the complaint. All that is a side issue to the overall Intelligent Mail barcode (IMB) program, but gives an indication of the competitive issues involved for big players. Big fight over BofA’s deal The agreement estimated that over a three-year period, the bank could potentially save “double-digit millions,” according to a source familiar with the document, portions of which are public. Good news for the bank, but the American Postal Workers Union felt strongly that the USPS was far too generous and could lose millions on the BofA agreement, especially if the same terms were granted other large mailers. An October 2007 news article on the union’s website (www.apwu.org) quoted Postal Regulatory Commission Vice-Chairman Dawn Tisdale, who voted against the agreement, as saying that the cost to the Postal Service could be between $25 and $45 million, and that the terms of the NSA could By Bill Streeter, editor-in-chief What IMB involves The Intelligent Mail barcode program was initially announced in 2003, then became available in 2006 on a voluntary basis. It now will be required to receive the maximum USPS automation discounts, according to Kevin Conti, director of mailing solutions for Pitney Bowes. (A white paper, “Getting Smart About Intelligent Mail,” is available from Pitney Bowes at www.pb.com–click on “Intelligent Mail Update.” The Postal Service originally planned to implement this requirement in January 2009, but moved it back to May 2009 after hearing from mailers. It also will continue to offer automation pricing for the predecessor POSTNET barcode until May 2010, whereas that originally was going to be phased out when IMB became required. The Intelligent Mail barcode combines the functions of several existing barcodes—OneCode ACS, POSTNET, and ABA BANKING JOURNAL/AUGUST 2008 7 Subscribe at www.ababj.com http://www.usps.com http://www.usps.com http://www.pb.com http://www.pb.com/bv70/en_us/extranet/contentfiles/editorials/downloads/ed_IMB_How_To_Optomize_IMB_no1.pdf http://www.pb.com/bv70/en_us/extranet/contentfiles/editorials/downloads/ed_IMB_How_To_Optomize_IMB_no1.pdf http://www.apwu.org http://www.ababj.com
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