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Home Coworking

Is Your Workspace a CMRA? Prepare Now For Big Compliance Changes

U.S. commercial mail handling regulations are changing. If your workspace receives mail on behalf of clients, it’s time to act. Here’s what you need to know.

byMike Sullivan
June 22, 2023
in Coworking
Reading Time: 9 mins read
A A
Is Your Workspace a CMRA? Prepare Now For Big Compliance Changes

Compliance is absolutely vital in the flexible workspace industry. Centers that don’t comply with the regulations put themselves at risk, and also risk tarnishing other operators.

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  • U.S. commercial agent mail handling regulations are changing, which will impact the way flexible workspaces and virtual office centers receive mail. 
  • Importantly, centers will soon be tasked with ensuring that every client record is kept up to date, including client IDs. 
  • Among the other major changes, data will be collected through a centralized online system, reducing reliance on hardcopies. 

This article was written by Mike Sullivan, Chief Marketing Officer for Alliance Virtual Offices. Alliance Virtual Offices is a leading provider of virtual office solutions that help innovative businesses scale faster, including high-quality flexible workspaces, market-leading tech infrastructure, mail forwarding, and professional receptionist support.   

Are you a workspace, coworking space, or a virtual office that accepts mail for clients in the U.S.? 

Survey

If yes, then listen up. Big changes in mail handling compliance are coming your way. 

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The current Commercial Mail Receiving Agency (CMRA) process is being updated as part of government fraud prevention measures. Under a new regulation published January 12, 2023, centers will submit client information to a centralized online database rather than rely on paper forms. 

Centers will also need to be responsible for keeping their own and their clients’ documentation and IDs up to date. That means if a client’s ID is due to expire, you’ll need to act promptly. 

These changes are designed to strengthen security measures and ensure compliance. But in the meantime, there will likely be teething problems while centers figure out the best way forward. 

Alliance Virtual Offices, a global virtual office marketplace, is actively working on solutions to enable centers and clients to remain compliant. 

We are focused on streamlining operations for center partners and ourselves so we can deliver value to centers and ultimately to serve our clients in the best way possible. We’re developing systems to enable compliance, but also to assist centers with these changes and ensure successful outcomes for our clients by streamlining the onboarding process. 

The following information is intended to help business centers and coworking spaces understand the changes coming their way. 

Background: What are the current rules? 

Handling mail that belongs to someone else requires special permission.  

That’s why every flexible office center that receives, signs-for, stores, or redistributes mail on behalf of a person or company must first apply for CMRA status, using USPS Form 1583-A (Application to Act as a Commercial Mail Receiving Agency). 

Once they have submitted this form, the center becomes a commercial mail receiving agent, or CMRA. 

The center must then ensure that every new client signs a form, giving the center permission to become their CMRA. Confusingly, the client’s form is also called PS Form 1583, but notice it doesn’t contain the “A” suffix. 

The client’s 1583 form, Application for Delivery of Mail Through Agent, must be signed by the client with a notary or a center representative as witness. Virtual office companies, including Alliance Virtual Offices, typically provide an online notary for this part of the process. 

The client also provides two types of ID to complete the form (one must have a photograph) before the forms are sent to the Post Office. 

If the client stops using the workspace for mail, the center must notify the Post Office of the changes. 

The center should keep a copy of every client form and provide paper copies to the Postal Service each quarter (although we are aware that many, if not most, local post offices don’t want to receive these paper records and instruct the centers to hold onto the paperwork instead). 

Why is the process changing? 

This process has been around for many years. It’s manual, heavy on paperwork, and prone to human error. It is also inconsistently enforced, with some local post offices not even being aware of these regulations, while others are very strict with their enforcement. 

Survey

Switching to a centralized online system has clear operational benefits, but more importantly, it’s designed to improve security. 

Many foreign countries already have much stricter requirements similar to the new regulations being unveiled by the USPS. These changes are effectively bringing the U.S. in line with best practices around the world. 

The USPS is under the jurisdiction of the Homeland Security and Governmental Affairs Committee. The new proposed system is part of wider measures to reduce fraud and increase visibility of any potential money laundering or terrorism activity. This is also resulting in new regulations from FinCEN. 

Here’s the official “why” from the Federal Register: 

These proposed changes are designed to standardize the application and enrollment process for CMRA customers through a centralized online system that will provide increased assurance that mail is delivered as addressed and mitigate the risk of fraudulent activity. 

How is the process changing? 

The following changes are being implemented in CMRA regulations:  

  • Minor changes have been made to PS Form 1583, Application for Delivery of Mail Through Agent (changed April 2023). See the updated PS Form 1583 here.
  • Minor changes have been made to PS Form 1583-A, the application for a center to act as a Commercial Mail Receiving Agency (changed January 2023). See the updated PS Form 1583-A here.
  • The USPS is creating a new online database — Customer Privacy Act System of Records (SOR) — where all CMRAs must submit their customer account information.   
  • CMRAs will maintain an online account with the USPS Business Customer Gateway (BCG) portal to access this database.  
  • CMRAs and their customers will be required to keep current forms of identification on file with the USPS through the new database.  
  • Non-compliant CMRAs may face suspension but will have 30 days to rectify issues and comply with regulations. 

When is this happening? 

According to the Federal Register’s Final Rule document, published May 19, 2023, the effective date is July 1, 2023. 

But don’t panic. There is still no official date on the rollout of the new online database. All registered CMRAs will be notified when that happens, and we’ll share all relevant updates here, too. 

“As part of the final rule, CMRAs will receive direct notification from the Postal Service informing them how to gain access to the CMRA Customer Registration Database (CRD).

2023 Media Kit Allwork.Space

Following notification, the CMRA will have a period of approximately 9 months to collect and enter into the CRD new PS Form 1583s for each of their existing Private Mailbox (PMB) customers.” – Final Rule document 

What are the expected pros and cons? 

Switching to a centralized online system makes sense, both in terms of operational efficiency and security. One problem with the current system is that centers are supposed to keep a hardcopy file of every client’s information forever, even if that client moves on. 

If there are any delays sending this information to the Post Office, or if data is lost or found to be incorrect on inspection, the USPS has the authority to stop sending mail to that center. This would clearly cause significant problems for any clients located at that center, likely damaging a number of businesses in the process — along with the center’s reputation. 

The new process should help to alleviate this problem by providing a faster online lookup of every client in the building.  

However, the requirement to keep all client IDs up to date will add to operators’ workloads. It will be essential to create a robust system that alerts center managers to upcoming expiration dates — enabling them to contact the client and gain new ID documentation ahead of expiration. 

What’s next? 

Compliance is absolutely vital in the flexible workspace industry. Centers that don’t comply with the regulations put themselves at risk, and also risk tarnishing other operators. 

CMRA forms and identity checks exist for a reason. They help to prevent potential fraudsters from using workspaces and virtual offices to cover-up illegal activity. 

We feel it’s essential to share these changes with the industry to ensure every workspace, coworking space, and virtual office keeps up with the necessary changes and abides by them, for their own benefit as well as the reputation of the wider industry. 

We’ll continue to provide updates. 

Further reading: 

Federal Register: Final Rule 

Federal Register: A Notice by the Postal Service 

CMRA: Why You Should Process Mail In Your Workspace And How To Do It Legally 

Going Virtual? Make Sure Your Virtual Office Is Compliant 

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Mike Sullivan

Mike Sullivan

Mike Sullivan is the Chief Marketing Officer at Alliance Virtual Offices, a global virtual office network providing flexible workspace solutions for modern businesses. Mike utilizes his deep understanding of the virtual office and flex space industry to provide expert insights that help centers streamline virtual office operations, reduce cost, and maximize revenue.

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