Federal regulators Wednesday issued a stinging order on Wednesday outlining “comprehensive” shortcomings at USAA Federal Savings Bank, their third attempt to force overhauls at the veteran-focused bank in recent years.
In a cease-and-desist order released Wednesday, the Office of the Comptroller of the Currency —USAA’s primary federal bank regulator — said it’s prohibiting the San Antonio bank from adding “any new product or service” or expanding its membership without evaluating the risks of getting bigger.
The order follows
Key USAA leaders have left in recent months or are set to leave next year, including USAA CEO Wayne Peacock, a sign of lingering frustration from regulators that USAA hasn’t completed its required overhauls.
The OCC made that clear in Wednesday’s announcement, which said the bank remains in “noncompliance” with several items the OCC flagged in similarly wide-ranging orders in 2019 and 2022.
Regulators flagged “unsafe or unsound practices” at the bank, including its poor earnings, information technology systems, compliance with consumer protection laws, internal audit issues and reporting of suspicious activity.
In a statement on Wednesday, USAA said although its “progress has not been consistent or swift enough, the Bank is well-positioned to complete this work.”
The bank also pointed to signs of progress in meeting regulators’ demands. The OCC, for example, agreed to terminate a 2022 consent order tied to the bank’s anti-money laundering practices after seeing needed improvements.
“Moving forward, our path is clear,” USAA said in its statement.
The company is continuing to “identify and resolve issues while strengthening the rigor of our programs and processes” and investing in new systems plus improved training for staff, USAA said in the statement.
The company also said that USAA’s financials are strong, with its holding company getting top marks from the ratings agencies S&P, Moody’s and AM Best.
