Government affairs

Legislative Updates

Letter carriers help preserve SEC’s paper-based tax instructions mailing standard

With little fanfare, the Securities and Exchanges Commission (SEC) reportedly has withdrawn the proposed “Investment Company Reporting Modernizing Rule” (Rule 30e-3), which, if implemented, would have allowed mutual funds to discontinue the mailing of shareholder reports and other important investment information to investors. Simply put, shareholders would have been required to access reports online instead of having the option to receive them by mail or electronically.

“The paperless push among federal agencies doesn’t just diminish transparency and access to this crucial information,” NALC President Fredric Rolando said. “It forces investors to opt-out of a less convenient form of communications while removing from our satchels a segment of First Class Mail that millions rely on.”

According to an SEC study in 2012, 71 percent of American investors prefer to read the annual reports in paper format rather than online. In fact, 30 percent of investors abstain from using the internet for investment correspondence due to concerns about security. Recent studies by the Department of Commerce and the Pew Research Center have also found that over 30 percent of Americans lack broadband internet service, 41 percent of Americans over the age of 65 do not use the internet at all, and nearly half of all minority households lack regular internet access.

Responses to the proposal reflected what the SEC’s own studies have shown about the paper preference. Among the nearly 1,000 Americans who filed comments with the SEC in response to Rule 30e-3, with 92 percent in direct opposition, many were letter carriers who mobilized after NALC asked members to take action last July.

“For the millions of Americans without internet, the Postal Service remains the only way to receive important financial information,” Rolando said. “Thanks to the hard work of our activists, we’ve helped to ensure Americans affected by the digital divide receive fair and equal access to shareholder information.”

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