USAA on the Brink? Alarming Study Reveals ‘Essential Collapse’ Amid Compliance Chaos and Plummeting Revenues

While USAA has been a renowned banking organization supporting military troops, veterans, and their families for decades, it has recently faced criticism from regulators and customers. A recent joint investigation by American Banker and the San Antonio Current outlines the organization’s many difficulties and how the bank and insurance are now “navigating a minefield of its own making.” For example, it has been penalized for charging military personnel higher loan rates than federal law allows. For these and other infractions, regulators failed the Community Reinvestment Act exam twice in a row, which examines how well banks serve communities.

This is an exam that most banks easily pass, and the failures in 2020 and 2023 indicate “a fundamental breakdown” at USAA, according to Adam Rust, director of financial services at the Consumer Federation of America, in the article. “What’s especially shameful about it is that they’re serving service members who deserve better,” said the soldier.

Customers have reported losing thousands of dollars this year due to suspicious transactions and withdrawals, according to News 4 San Antonio. Some claim they were even ordered to conceal negative balances in their accounts after their money was taken. Below is what you should know about the situation at USAA and what you can do if you have a problem with your bank.

Major problems abound in USAA:

USAA did not spend sufficiently on protections as it developed to maintain excellent relationships with long-term consumers and regulators. It has also struggled to profit in a recent $398 million 2023 tax deficit. Three former compliance employees who spoke on the condition of anonymity to American Banker and the San Antonio Current complained about the department’s struggles under pressure, with a lack of cohesiveness, little openness to making processes more efficient, and initiatives that “were either falling through the cracks or just getting roadblocked.”

In 2023, consumers filed 417 complaints with the Consumer Financial Protection Bureau over the bank’s checking and savings accounts, up from 150 in 2018. “Separately, these various violations could be understood, but collectively, they show a pattern that raises concerns,” Mark Williams, a Boston University finance professor and former Federal Reserve bank supervisor, told American Banker and the San Antonio Current. “There’s something more fundamental.” Customers questioned for the article expressed dissatisfaction with the level of customer support they received and requested greater transparency regarding security risks.

Handling Issues with Your Bank

There are other options if you’re having problems with your bank and don’t feel like you’re making progress while chatting with customer service professionals. When attempting to resolve any difficulties, make sure to document any interactions that occur. You can also file a complaint about financial goods and services with the Consumer Financial Protection Bureau, making sure to include as much data as possible. The agency will either transmit the complaint to the corporation for a response or to another agency it believes is better qualified to assist. If you are dissatisfied with the customer service you received, you can file a complaint with the Better Business Bureau. Keep in mind that banks may not respond. As a customer, you have more control than you may know. If dissatisfied with your bank, consider moving to another.