‘A minefield of its own making’: New investigation of USAA reveals ‘fundamental breakdown’ with repeat compliance issues as profits vanish

Significant Issues Abound at USAA

Overall, it appears USAA did not make sufficient investments in safeguards as it grew to keep in good graces with their longstanding customers and with regulators. The bank subsidiary has also been struggling to turn a profit in recent years, reporting a pretax loss of $398 million in 2023. S&P Global Ratings in May said it does not expect the bank to return to profitability until 2025.

Three former compliance employees who spoke on condition of anonymity to American Banker and the San Antonio Current complained about the department struggling 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, customers filed 417 complaints to the Consumer Financial Protection Bureau over the bank's checking and savings accounts, a dramatic increase from 150 in 2018.

Starting in 2019, USAA has also faced a number of fines — $3.5 million over customer-related violations, $85 million over compliance and management issues and $140 million over weak protections against money laundering.

USAA also paid out $64 million to settle a class action lawsuit related to overcharging military members who were entitled to certain protections.

Then there’s the many changes higher up. It’s not only USAA CEO Wayne Peacock who is leaving (he’s planning on retiring in 2025). The past year has seen several leaders part ways with the company, including Bank President Paul Vincent, Chief Audit Executive Gilbert Gitichie, Chief Risk Officer Neeraj Singh, and Chief Security Officer Jason Witty.

Experts say that there may be a significant breakdown at USAA.

"Independently, these various violations could be understood, but collectively, they show a pattern that raises concerns," said Mark Williams, a Boston University finance professor and a former bank supervisor at the Federal Reserve, to American Banker and the San Antonio Current. "There's something more fundamental."

Customers interviewed for the article said they felt the quality of customer service they received had fallen and they wished there was more transparency about security issues.

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Handling Issues With Your Bank

If you’re facing issues with your bank and don’t feel like you’re getting anywhere when speaking with customer representatives, there are other alternatives. When making attempts to solve any issues, make sure to document any interactions you have.

You can take to social media to draw attention to your problem and air out your grievances or you can send a direct message to the company's social media profile stating your concerns.

Speaking to someone from the CEO's office may convey how serious you are and the need to get your concerns heard. Look up the bank's main telephone number and request to speak with somebody who works at the CEO's office. State your situation and politely explain your frustrations as your goal is to be heard and hopefully the person on the other line is willing to help you.

If you feel you’ve been discriminated against, or the bank has been harmful or misleading in any way, consider filing a complaint with regulators. The Federal Reserve has a consumer complaint form you can fill out online, or you can call their consumer helpline. Here’s where all your documentation about your issue comes in handy.

You can also submit a complaint about financial products and services to the Consumer Financial Protection Bureau, and be sure to provide as many details as possible. The agency will either forward the complaint to the company to help you get a response, or forward it to another agency it feels may be better suited to assist.

You may also submit a complaint to the Better Business Bureau if you’re upset about poor customer service. Keep in mind banks may not offer a response.

As a consumer, you have more agency than you may realize. If you’re not satisfied with your bank, you should seriously consider switching to another.