September 07, 2020

Empty mailboxes, missed rent: US Postal Service's struggles have real-world impacts

Clarification: This story mischaracterized how Cybelle Elena’s small business in Nashville, Tennessee, has changed amid the coronavirus pandemic. The number of packages she sends has significantly increased, but business is down.  

Empty mailboxes, uncounted ballots, late medication, missed rent payments – those are among the real-world impacts of the struggles of the U.S. Postal Service.

Many of those issues, documented this summer across the USA TODAY Network, predate the feverish debate about whether mail is delayed by the Postal Service's efforts to cut overtime, remove mail processing equipment and even move blue collection boxes.

Top Democrats allege the Trump administration is kneecapping the Postal Service to hamper mail-in and absentee voting, which surged this spring amid the coronavirus pandemic. In November, more supporters of Democratic presidential candidate Joe Biden are likely to vote by mail. 

The Postal Service's long-standing financial issues have been worsened by the pandemic.

"The U.S. Postal Service, like other delivery companies, has experienced some temporary service disruptions in a few locations domestically due to the COVID-19 pandemic," spokesman Dave Partenheimer acknowledged in an email to USA TODAY.

Postmaster General Louis DeJoy said he will pause – but not roll back – cost-cutting moves until after the election. He appeared before a Senate committeeFriday and a House committee Monday, defending his moves and saying the Postal Service was committed to handling the nation's election mail.

The House passed a bill Saturday to provide another $25 billion to the Postal Service and prevent further changes.

Postal Service documents released by a House lawmaker over the weekend show nationwide delays in mail delivery since the beginning of July, weeks after DeJoy started as postmaster general. 

What problems with mail service are people complaining about?

Accounts of mail delays have been documented across the country in recent weeks by the USA TODAY Network. One of the most common complaints: Mail is simply not delivered for days on end.

In Louisville, Kentucky, Caleb Jenkins said he did not receive anything for six days straight in July. "With medical bills and all those type of things coming in the mail, it's been really frustrating," he said. 

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In rural California, Tracey Legate-Dumke said in a Facebook group that she went about a month without mail this summer.

Dianna Burns wrote in the same group that her rent was late in June because her mail carrier didn't pick up her mail for four days. She took the envelope to the post office and complained. "I also complained that I don’t get my mail, or it gets to me two weeks after it was sent out," she wrote.

Business owners and people who rely on mail-order medications raised similar issues.

For about a decade, Nashville small business owner Cybelle Elena has depended on the Postal Service to deliver her products – clothing and accessories. Usually, it's "extremely reliable," she said, but during the pandemic, packages have been delayed days or even weeks. Some never arrive.

She's sending more packages since she started producing masks, but she spends more time and money helping customers who haven't received their orders.

In California, Richard Valdez – a Vietnam veteran and former state commander of Disabled American Veterans – said he's still waitingfor medications he ordered from the Department of Veterans Affairs on July 25. They typically arrive within three or four days, he said. 

Delays in some areas spurred the VA to switch to other carriers, said Randy Reese, executive director of Disabled American Veterans' Washington headquarters. The VA detected delays in Detroit and parts of New Jersey and New York, and it temporarily switched to UPS in those places.

The VA told the veterans group that average delivery time increased from 2.3 days in June 2019 to about 2.9 days in July.

A spokeswoman for the VA, Christina Noel, declined to say whether the VA received complaints, when the delays were detected or how long they lasted. Prescriptions sent by U.S. mail arrive within three days on average, she said, “less than the 3-5 day delivery timeline outlined on the department’s website.”

It's unclear how widespread delivery problems are, but USPS data shows deliveries are taking longer than they did last year. On-time first-class deliveries dropped from 93.4% in the second quarter of 2019 to 90.8% for the same period this year. The goal was 96%.

In New York City, a USA TODAY reporter did not receive absentee primary ballots until two days after the primary in June, even though an email from the Postal Service's Informed Delivery indicated they would be delivered several days before the election.

Concerns over mail-in voting problems have fueled a firestorm over the Postal Service's performance and cost-cutting. Even routine maintenance of mailboxes has been labeled voter suppression. Attorneys general in 20 states have sued the Trump administration over the changes.

The impact of those changes on mail delivery is unclear to Stephen Kearney, a former senior executive with the Postal Service who serves as the executive directer for the Alliance of Nonprofit Mailers, which says its members are responsible for about 10% of all USPS mail volume. 

Though mail delays tied to the pandemic are well-documented from April to June, delays since the Postal Service cut expenses in July are not, he said.

Anecdotally, "any variations seem to be within normal ranges," he told USA TODAY by email.

How pandemic has affected USPS

Partenheimer said delivery service is "slowly getting back to normal" after problems. Private shipping companies also struggled in the early months of the pandemic.

Augustine Ruiz, a spokesman for the Bay Area Postal Service, said a backlog documented by The Californian, part of the USA TODAY Network, is due to low staff numbers and high parcel volumes. 

"More people are sheltering at home, and they need essentials, so they're buying everything online," Ruiz said told The Californian in mid-July. 

Post offices struggle to handle the flood of packages because of staffing issues caused by the coronavirus pandemic and personnel cuts over the past few years, said Cassie Williams, a steward of the American Postal Workers Union local in Nashville, Tennessee.

USPS spokeswoman Martha Johnson told USA TODAY on Wednesday that 8,789 postal employees have tested positive for COVID-19 – slightly more than 1% of its workforce.

A history of financial problems

The U.S. Postal Service has touched nearly every American household during its more than 200 years of service, delivering letters, birthday cards, medicine, Social Security checks, packages and magazines.

But if the trusted institution were a hospital patient, it would probably be in the intensive care unit.

An audit issued in September 2019 by the Postal Service’s Office of Inspector General said mail handling and delivery costs increased by roughly $5 billion or 13% over five years when adjusted for inflation. Total mail volume carried dropped by 5.7%, the audit said.

Though package volume has increased during the pandemic, that's not expected to offset losses in marketing and first-class mail, which generated more revenue in 2019.

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A 2006 federal law requires the Postal Service to pre-fund retiree health benefits, even though the money won’t be paid until well in the future. The provision has cost billions.

The Postal Service reported a loss of nearly $9 billion last year.

A Government Accountability Office report issued in May said congressional action is “essential to enable a sustainable business model” that would keep the Postal Service running. Congress and other stakeholders haven’t reached an agreement on a road forward.

Union officials said cost-cutting and staff cuts contributed to the delays reported across the nation.

"You can't blame (all of) this on the pandemic," Williams said. "They were setting this up from years ago. They have cut it down to a minimum."

USPS enacted rules to limit overtime this summer

In July, a month after DeJoy took over, the Postal Service outlined a number of measures to cut costs, including overtime. Extra delivery trips were to be eliminated, and shifts would start and end on time.

Because of the changes, “we may see mail left behind or mail on the workroom floor or docks," said a memo, which the American Postal Workers Union shared with USA TODAY. The causes would be investigated and fixed the following day, the memo said.

In a letter to lawmakers this month, Postal Service CEO David Williams said the agency is trying to increase the efficiency of mail sorting and processing, which may include removing machines and running them for shorter periods, depending on volume. 

He acknowledged that “temporary service impacts” may occur but pledged they would be monitored and corrected. 

Are there more complaints about delivery times than usual?

Union officials criticized those decisions, saying they would cause delivery delays. 

Des Moines Local 44 American Postal Workers Union President Mike Bates said a supervisor ordered a carrier to halt his route at the scheduled end of his shift, even though he had not finished deliveries. 

Bates said management carried out the removal of mail-sorting machines at the Des Moines distribution center. That caused a backlog at some post offices in August, Bates said.

"We've been programmed that it's, 'Every piece (of mail), every day,' " he said. "When you see stuff left behind, it hits you in the core. You take a lot of pride in just moving the mail." 

The Alliance of Nonprofit Mailers said it's too soon to know what effect cost-cutting measures are having, if any: "Seven weeks into the new leadership of USPS, we believe it is near-impossible to sort out whether a mail delivery problem is business as usual, related to the pandemic, an adjustment to the new operational policies, or something else. Time and real data will tell, hopefully."

What was the impact on primary voting?

Reports of mail-related problems during this year's primary elections fuel concerns heading into the general election.

More than 6,400 Michigan voters did not have their absentee ballots counted for the primary elections because clerks received them after polls closed on Election Day, Aug. 4. 

In New Jersey, a postal worker left ballots on a hallway floor in May instead of putting them in mailboxes because he said his access key wasn’t working, according to a report issued by the post office inspector general.

The Postal Service identified hundreds of Wisconsin absentee ballots for the election in April that never made it to voters or couldn't be counted because of postmark problems, according to the inspector general.

Sweeping federal lawsuits filed this week suggest cost-cutting measures could affect the general election.

A lawsuit filed by attorneys general in 14 states said the Postal Service changes would require states to pay first-class rates if they didn't want voters to put a stamp on ballots. That would raise the cost from 20 cents to 55 cents per ballot, costing states “tens of millions of dollars," the lawsuit charged. A similar suit has been filed by a group of six other states and the District of Columbia.

A lawsuit filed by the National Urban League, the League of Women Voters and Common Cause alleges the Postal Service took out of service one of every seven of its Delivery Barcode Sorter Machines, used to sort letters, postcards and ballots.

By the time DeJoy called a temporary halt to the process, the Postal Service had decommissioned 95% of the sorting machines scheduled to be removed, the lawsuit alleges, citing media reports.

Contributing: Ben Tobin, Louisville Courier Journal; Steve Orr and Gary Craig, Rochester Democrat and Chronicle; Kate Cimini, Salinas Californian; Cassandra Stephenson and Mariah Timms, The (Nashville) Tennessean; Nicholas Wu and Savannah Behrmann and Nicholas Wu, USA TODAY; The Associated Press

January 03, 2019

Loan experts warn consumers that any dispute in a credit report may cost them the refinance they need. As noted by specialists, Fannie Mae and Freddie Mac do not accept loan applications from consumers who have a disputed item under their name. This is regardless of how high the credit rating of a person is.

Experts say consumers who have a credit score near 800 and a solid equity in their home do not have the assurance that they will get mortgage refinancing from government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.

Fannie Mae, which is short for Federal National Mortgage Association, uses an automated underwriting system which does not accept any application where there is a notation in the credit report regarding a disputed account or trade line.

Consumers dispute a medical bill or credit card bill that is inaccurate or does not belong to them (those that were charged on the wrong person’s name because of identity theft). According to loan specialists, a valid dispute closes any inaccurate or fraudulent account. Creditors normally promise to remove disputed items afterwards. However, there are instances when they fail to do so.

Even if a dispute has been won, experts say, a loan officer will not recommend an approval for a mortgage refinance if the lender has not removed the negative items yet.

Federal law, through Fair Credit Reporting Act, guarantees a consumer the right to contest any fraudulent or inaccurate item in his credit report. Once an item is challenged, a notation is placed in his file with the credit reporting agencies (CRAs). Most lending systems do not factor accounts with a disputed notation. But Fannie Mae’s automated underwriting system does not. Instead of forwarding applications to banks immediately, they send those with disputes back to lenders concerned.

A representative from the GSE explains that they automatically send “consumer disputed” accounts back to lenders for manual assessment. Lenders then have the responsibility to determine whether the dispute is valid and underwrite the borrower’s credit accordingly.

Analysts say Fannie Mae does this since banks normally reject consumers with disputed items in their accounts and blame the GSE for forwarding illegible applications.

National Association of Responsible Loan Officers, in a statement, explains that national creditors, large banks in particular, do not entertain applications, which need additional time and manual research. They add that banks do not want delay in operations.

Freddie Mac representatives say they have similar policies with Fannie Mae so they advise consumers to get their credit reports clean before applying for government-back loans.

On a brighter note, Fannie Mae says it is reviewing its policies regarding the matter.

January 10, 2019

"Account Disputed by Consumer"

Credit account dispute could stall mortgage application

Fannie Mae and Freddie Mac, have been kicking such applications back to lenders for manual underwriting.

October 25, 2009|By Kenneth R. Harney

Reporting from Washington — 

Could a little-known and potentially controversial practice by mortgage giants Fannie Mae and Freddie Mac kill or stall your next loan application? Absolutely.

Picture this scenario: You've got outstanding credit scores close to 800 and solid equity in your home. All you want is to refinance your mortgage to take advantage of today's rock-bottom interest rates.

Your application should rocket through your lender's system and get you a great rate. But your bank says: Sorry, we can't do your loan. Fannie Mae's automated underwriting system won't accept any application where there is a notation in the credit report that a consumer has disputed an account or "tradeline."

You explain that the dispute -- over a medical bill or a credit card charge -- was valid. The account was closed. The creditor promised to remove the dispute notation but apparently didn't. Your loan officer won't budge. Policy is policy, he says. Your refi application is dead.

What's going on here? Under the Fair Credit Reporting Act, consumers are guaranteed the right to dispute erroneous information on any account in their credit files. Once a consumer challenges that information, a notation to this effect must be made on the file. As long as it remains, most credit-scoring systems generally will not factor the disputed account into the computation of the consumer's score.

Does Fannie Mae deny loans to consumers simply because they exercised their legal rights? In an e-mail response, communications director Amy Bonitatibus confirmed that the firm's automated underwriting system -- used by virtually all lenders doing business with Fannie Mae -- sends applications with "consumer disputed" items on credit reports back to the lender for what is known as "manual underwriting." Bonitatibus said the company does "not prohibit delivery of a loan . . . where the borrower has disputed information" on his or her credit report. Through manual underwriting, she said, "our policy requires the lender to determine and document whether or not the disputed information is accurate and underwrite the borrower's credit accordingly."

What's the practical effect of bucking back applications to lenders for potentially lengthy discussions with applicants and their creditors? According to consumer postings on FiLife, a financial education website, the net result often is that the bank brushes you off and blames it on Fannie Mae.

Christopher Cruise, a Maryland mortgage originator and founding member of the National Assn. of Responsible Loan Officers, said, "There's no question -- when there are lots of other applications and business is good," applications requiring extra time and research "just aren't going to move."

Evan Hendricks, author of the book "Credit Scores and Credit Reports" and publisher of Privacy Times, a newsletter that outlined Fannie Mae's policy in a recent report, calls it "extremely unfair to honest consumers who are simply doing what they should -- challenging misinformation."

Freddie Mac's policy on disputed tradelines is broadly similar to Fannie Mae's, spokesman Brad German said.

Why are Fannie and Freddie so uptight about applications with disputed accounts? Mainly because credit repair companies have been gaming automated systems tied to credit scores by disputing accurate but negative items. When tradelines in a consumer's files contain a "disputed" notation, most scoring software ignores them for the purposes of computing the score.

A seriously delinquent account that could legitimately depress a FICO score might be taken out of the equation -- at least temporarily -- if a "consumer disputed" notation is in the file. Fannie and Freddie are trying to protect themselves.

For the time being, it's tough luck for all applicants with disputes in their credit files.

Fannie Mae, however, says it is reviewing its policy, so maybe there's a chance for a change.

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