USAA Bank Gets Failing Grade Over 'Illegal' Practices

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Locked
Topic Author
SueG5123
Posts: 173
Joined: Fri Jan 01, 2016 8:41 pm

USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by SueG5123 »

Interesting story in The Houston Chronicle this morning: USAA bank given a failing grade by bank regulator over "discriminatory or other illegal credit practices." Evidence of 600 violations: failure to provide protections to military reservists, wrongful repossessions of vehicles, filing inaccurate affidavits in default judgment cases, and 54 violations of the Military Lending Act.

https://www.expressnews.com/business/lo ... 622526.php

I cut most of my ties with USAA a while back, given their usurious rates and declining customer service.
pointyhead
Posts: 177
Joined: Sun Apr 08, 2012 11:38 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by pointyhead »

I've never banked with them but I do have my home, auto, and umbrella policies at USAA and I have always been very happy with their service, price, and coverage. We have had a few auto claims over the years but my rates never really changed much.

PH
Rex66
Posts: 276
Joined: Tue Aug 04, 2020 5:13 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Rex66 »

Their insurance is typically good if their rates are competitive. Occasionally the rates are not.

Banking is fine. No great rates though.

Their investments were horrible and now done by Schwab.
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

Rex66 wrote: Tue Oct 06, 2020 11:30 am Banking is fine. No great rates though.
I use their 2.5% cash back limitless credit card, while they pulled the product for new people, i'm glad they have honored it for those of us who got it.

only general purpose card that might be better is one of the BOA cards with the top tier perks due to assets.

But agree that the actual checking/savings is pretty boring.
rj49
Posts: 583
Joined: Wed Feb 23, 2011 12:22 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by rj49 »

I tried their banking and checking, and they're not worth the hassles and risks of trying to have a one-stop shop for financial matters. Like Penfed, they're obsessed with growth and adding endless products, which they actively market to military members. That means lots of spam and junk mail and outside companies they use for added profits, one of which wouldn't let me unsubscribe from its spam. I stick with BECU credit union for checking and savings, with online savings and CDs through Discover Bank. Many years ago the CEO of USAA also sent out mail to members, asking them to lobby against a financial regulation law that would cost them money, which I found unacceptable.
DownToThis
Posts: 58
Joined: Mon Jan 01, 2018 8:47 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by DownToThis »

Soon2BXProgrammer wrote: Tue Oct 06, 2020 11:34 am
Rex66 wrote: Tue Oct 06, 2020 11:30 am Banking is fine. No great rates though.
I use their 2.5% cash back limitless credit card, while they pulled the product for new people, i'm glad they have honored it for those of us who got it.

only general purpose card that might be better is one of the BOA cards with the top tier perks due to assets.

But agree that the actual checking/savings is pretty boring.
+1 their 2.5% cc is great. I also have them for home/auto/vpp/umbrella insurance and the few claims I've had with them have been handled well. Moved all of my investments/roth out a few years ago to vanguard
AB609
Posts: 55
Joined: Thu Oct 17, 2019 9:02 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by AB609 »

I've been a member for over 30 years and they definitely have gone down hill in that time. I have an issue with account access that should be a simple matter to fix but still isn't fixed after numerous phone calls and e-mails over the past couple months.
brokendirtdart
Posts: 240
Joined: Mon Jan 02, 2017 8:27 pm
Location: USA!

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by brokendirtdart »

Really the only thing keeping me with them for is the 2.5% card and competitive insurance rates.

Nothing in that article surprises me.' I do have a question though.
“We are committed to serving every USAA member with excellence and in accordance with all applicable laws and regulations,” USAA spokesman Matt Hartwig said in an email Monday.

“The rating by the OCC does not reflect our ongoing commitment to lend to and invest in local low- and moderate-income communities,” he added. “Our mission calls us to help ensure the financial security of all our members. We have higher expectations of ourselves and are focused on restoring our CRA ratings to previous levels.”
Since when has that been the core clientele or goal of USAA?
ScubaHogg
Posts: 762
Joined: Sun Nov 06, 2011 3:02 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by ScubaHogg »

They’ve been my primary banker for 15+ years. Nothing eye watering, but I have no complaints either. They pay the bills I tell them to pay on time.
“Unexpected Returns dominate the Expected Returns” - Ken French
krafty81
Posts: 340
Joined: Thu Jul 05, 2018 2:01 pm
Location: San Diego, CA

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by krafty81 »

I was disappointed when I called and asked USAA to set up a Trust Account for my recently departed father. They said, as of June 2020, they "no longer do that". When I asked why, the rep did not know. Seems like any decent bank should be able to set up a trust account for existing members - both me and my Dad. Red flag to me.
BGeste
Posts: 146
Joined: Wed Jul 24, 2019 11:55 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by BGeste »

This is one of many regulatory failures at USAA over the past several years. Over the last couple of years USAA has been fined by Federal government agencies. According to those reports they have serious operational and compliance breakdowns.
azanon
Posts: 2986
Joined: Mon Nov 07, 2011 10:34 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by azanon »

Used them for decades - my take: I have the 2.5% limitless cash back credit card - love that. Their app works really well for electronic deposits. I love their online tools for managing a checking account. Home insurance- competitive and no questions asked when i had a roof covered for hail damage. Their auto insurance cost is outrageous vs., say, GEICO so avoid that. Avoid their savings accounts because they’re low interest like brick and mortar bank - i use Ally instead.
MBB_Boy
Posts: 254
Joined: Sat May 12, 2018 4:09 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by MBB_Boy »

A few things to keep in mind:
1. CRA exams typically cover a multi-year time period. That's not 600 violations in one year - it's 600 over 3-4. Given they have 12M members and who knows how many transactions, I'm not immediately convinced that number matters on a nominal basis. I don't know exactly what the violations were of course, and maybe the actual expectation is 0. From personal experience, regulatory bodies love to issue press releases that hype up the negative things they find as a justification for whatever action they take. More often than not, when you read the details behind whatever the CFPB, OCC, etc do when they take an action or issue a fine you discover that the issues were from years ago, the bank already fixed them and paid its customer back, and in some cases it was actually the bank that alerted the regulator to the issue.

2. Looking at articles on this, their grades on the 3 parts of the CRA exam outstanding, high satisfactory, low satisfactory. That somehow comes out to a "Needs to Improve", because the regulator has discretion to dock them a whole grade because they are in the penalty box for other reasons (you can look up the Consent Order from a couple of years ago)

3. USAA Bank was recently named the Best Bank in the country by Forbest, and I think has a similar recent award from American Banker. For whatever bad this represents, they are still well liked by members and industry

In short, this shouldn't affect anyone's opinion or propensity to do business there. If it made sense for you before this, keep using them. If it didn't, then don't. I don't use them as my primary anymore, because over the past 10 years the rest of the competition has caught up. Everything about them is "good", but basically nothing is great. "Good" rates, "good" app, "good" products. But no fees, reimbursed ATMs, Bill Pay, and getting your pay a day early are tablestakes now in my opinion. Hopefully they socked away a bunch of money when this wasn't the norm and they had a competitive moat.

The exception (to me) is the call center - a few months ago when I had to wait literal hours to get on the phone with Chase, BOA, or neobanks where I have accounts like Varo or Sofi (IF you can even find a number), USAA picked up in less than 5 minutes. But honestly, I feel the need to call a financial instiution maybe once a year - and I wouldn't have had to call anyone that day if I was able to find what I wanted digitally.
Rex66
Posts: 276
Joined: Tue Aug 04, 2020 5:13 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Rex66 »

It’s good to keep it all in perspective and they still have positive ratings. I guess what bothers me is I’ve been with them over 30 years and they were better than they are today. It’s disappointing.
Silverado
Posts: 584
Joined: Fri Oct 18, 2013 6:07 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Silverado »

rj49 wrote: Tue Oct 06, 2020 12:01 pm I tried their banking and checking, and they're not worth the hassles and risks of trying to have a one-stop shop for financial matters. Like Penfed, they're obsessed with growth and adding endless products, which they actively market to military members. That means lots of spam and junk mail and outside companies they use for added profits, one of which wouldn't let me unsubscribe from its spam. I stick with BECU credit union for checking and savings, with online savings and CDs through Discover Bank. Many years ago the CEO of USAA also sent out mail to members, asking them to lobby against a financial regulation law that would cost them money, which I found unacceptable.
Interesting, I can’t remember the last email I received from USAA that wasn’t a notification of an account statement. I suppose if I changed my communication preferences to 'sure send me junk' they would blow up my inbox. I’ve never noticed anything from outside companies that I would attribute to them, but I don’t pay attention to the email that shows up in my inboxes that is not from someone I want to receive communication from, which for me means zero companies and about five people....

Been banking and insurance with them for about three decades. Two mortgages, which was a horrible experience both times, and have no plans to ever try them again for that.

But as others have said, no great banking rates from them in a very long time. Can’t beat the customer service for me.
tomd37
Posts: 3486
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by tomd37 »

I have been a member of both USAA and the Navy Federal Credit Union since 1961. I have used USAA for all of my various insurances needs and continue to do so. However, I have never used USAA for any type of banking needs. I have always been able to get better rates at NFCU over the years and more recently online banks such as Synchrony Bank or Live Oak Bank. Recently NFCU CD rates have stayed higher than Synchrony and Live Oak and I have kept my CD ladder there.

I don't think there is any possibility now of getting a "special" like NFCU offered early this year (a 17-month add-on certificate up to $75,000 at 2.25% APY) :wink:. I jumped on it for both myself and my wife and have been filling them up as other one-year CDs in my ladder matured.
Tom D.
Grinder
Posts: 4
Joined: Sat Sep 26, 2020 11:05 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Grinder »

I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
friar1610
Posts: 1838
Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by friar1610 »

tomd37 wrote: Wed Oct 07, 2020 8:50 am I have been a member of both USAA and the Navy Federal Credit Union since 1961. I have used USAA for all of my various insurances needs and continue to do so. However, I have never used USAA for any type of banking needs. I have always been able to get better rates at NFCU over the years and more recently online banks such as Synchrony Bank or Live Oak Bank. Recently NFCU CD rates have stayed higher than Synchrony and Live Oak and I have kept my CD ladder there.

I don't think there is any possibility now of getting a "special" like NFCU offered early this year (a 17-month add-on certificate up to $75,000 at 2.25% APY) :wink:. I jumped on it for both myself and my wife and have been filling them up as other one-year CDs in my ladder matured.
I agree with Tom on USAA vs NFCU. I did use USAA Bank for one significant transaction about 8-9 years ago. I wanted to pay cash for House B before I sold house A (knowing that the housing market in A's locale was moving slowly) without dipping in to my investments and triggering CGs. Plan was to take a Home Equity Loan/HELOC on House A before putting it on the market and using that plus other cash to buy House B. At that particular time USAA was offering a HELOC with interest only payments for up to 5 years. They treated me well during the application process, approved the HELOC expeditiously and I did access the HELOC, paying about 8 months of interest before selling the house and retiring the HELOC.

That said, NFCU has been our "go to" bank for about 40 years and USAA would have to do an awful lot to get us to switch. Same is true for USAA as an insurance (auto, hone, umbrella, etc.) company.
Friar1610
Grinder
Posts: 4
Joined: Sat Sep 26, 2020 11:05 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Grinder »

Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
User avatar
Gray
Posts: 798
Joined: Sat Apr 16, 2011 5:33 am
Location: Virginia

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Gray »

We have used USAA for decades for credit cards, insurance, and banking. Their banking has been innovative and remains more flexible than most, but their competitive edge is less than it was.

They have transitioned into a money-focused corporation despite their member-owned structure (owned by military officers).

They are steadily removing parts of their business that are not profitable. Investments, Trusts, Member Rewards, Car Buying, etc. I wonder what will be left when they’re done.

Go into USAA Community, their forum, and read some of the complaints posted there. I think they need stronger independent oversight and a strong, empowered ombudsman.

I bank with Chase, Ally, and Navy Federal (with accounts at PenFed). I like USAA’s banking tools the best, but it is important to diversify providers so you can shift business around.

USAA has performed for me, and I like them. Back in the 90s they had a really nice feel to them. I could call banking and they had very friendly and knowledgeable people. They still do, if you can find them. I seem to be able to find them. If I start getting call centers in India, I will probably reconsider USAA.

They have invested (and continue to invest) heavily in call center apps and automation. In addition, algorithms are continually assessing you for risk based on your banking patterns, etc. Based on my past business, very high credit score, and reliability I can deposit $100,000 in checks per day and make large external transfers. That’s not the case for most and especially new customers. Algorithms and policies can change, and everyone needs to be aware of that. Use USAA for its strengths, but open accounts elsewhere as well.
pj1983
Posts: 59
Joined: Tue Jul 17, 2018 9:50 am
Location: NoVA

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by pj1983 »

All of you with the "2.5%" rebate USAA credit card -- which product is that? I have the "Cash Rewards" card which just went from 0.5% (I think, I never really used it due to the low rebate) to 1.5%.

Agree with several others here that USAA has lost focus especially with the current CEO.
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

pj1983 wrote: Sat Oct 10, 2020 10:49 pm All of you with the "2.5%" rebate USAA credit card -- which product is that? I have the "Cash Rewards" card which just went from 0.5% (I think, I never really used it due to the low rebate) to 1.5%.

Agree with several others here that USAA has lost focus especially with the current CEO.
Its called the "Limitless Cashback Rewards"

It is currently not available for new customers, it was pulled as product.

Here is the old thread about it: viewtopic.php?f=11&t=201331
pj1983
Posts: 59
Joined: Tue Jul 17, 2018 9:50 am
Location: NoVA

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by pj1983 »

Soon2BXProgrammer wrote: Sun Oct 11, 2020 9:50 am
Its called the "Limitless Cashback Rewards"

It is currently not available for new customers, it was pulled as product.

Here is the old thread about it: viewtopic.php?f=11&t=201331
Thank you for the pointer to the previous thread. I went back through my emails to make sure I didn't miss a notification; looks like I wasn't a member of the cool kids club, either because of geography or my minimal use of USAA banking products. Oh well.
tj
Posts: 3927
Joined: Thu Dec 24, 2009 12:10 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by tj »

pj1983 wrote: Sun Oct 11, 2020 11:49 am
Soon2BXProgrammer wrote: Sun Oct 11, 2020 9:50 am
Its called the "Limitless Cashback Rewards"

It is currently not available for new customers, it was pulled as product.

Here is the old thread about it: viewtopic.php?f=11&t=201331
Thank you for the pointer to the previous thread. I went back through my emails to make sure I didn't miss a notification; looks like I wasn't a member of the cool kids club, either because of geography or my minimal use of USAA banking products. Oh well.
There were several states that it never launched in. California was a big one.
Golf maniac
Posts: 661
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Golf maniac »

There is SCRA (Servicemembers Civil Relief Act) which protects military members and CRA (Community Reinvestment Act). As a former regulator who spent extensive time in both areas there are problems with both regulations. For SCRA it was a really good idea, however, it was implemented with no way for banks to track who gets these benefits unless the service member discloses their eligibility. The defense department set up a database, but it was not very effective. So for SCRA it is a very difficult law for financial institutions to follow. I could go into any financial institution and find numerous violations.

On CRA it is again a law with good intent. Banks should lend across the community and not discriminate in their lending and investment practices. The intention was to eliminate the old redlining that used to happen. But it is very subjective for the regulator to make a judgment whether the financial institution meets the law. Three different examiners could look at the same institution and come up with 3 different ratings.

So, USAA is just one of many institutions struggling with these regulations. Unfortunately, some regulators are good and find the issues, other regulators not so good and miss these issues for years. I have only used their credit card on the banking side, with no issues. I have used their insurance products for year and found their service outstanding. I wouldn’t decide on using or not using their services based on these issues.
MBB_Boy
Posts: 254
Joined: Sat May 12, 2018 4:09 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by MBB_Boy »

Golf maniac wrote: Sun Oct 11, 2020 7:25 pm There is SCRA (Servicemembers Civil Relief Act) which protects military members and CRA (Community Reinvestment Act). As a former regulator who spent extensive time in both areas there are problems with both regulations. For SCRA it was a really good idea, however, it was implemented with no way for banks to track who gets these benefits unless the service member discloses their eligibility. The defense department set up a database, but it was not very effective. So for SCRA it is a very difficult law for financial institutions to follow. I could go into any financial institution and find numerous violations.

On CRA it is again a law with good intent. Banks should lend across the community and not discriminate in their lending and investment practices. The intention was to eliminate the old redlining that used to happen. But it is very subjective for the regulator to make a judgment whether the financial institution meets the law. Three different examiners could look at the same institution and come up with 3 different ratings.

So, USAA is just one of many institutions struggling with these regulations. Unfortunately, some regulators are good and find the issues, other regulators not so good and miss these issues for years. I have only used their credit card on the banking side, with no issues. I have used their insurance products for year and found their service outstanding. I wouldn’t decide on using or not using their services based on these issues.
For the CRA, any idea how it's supposed to apply to a direct bank like USAA or Ally? How does geography get determined when there are no branches? :confused
Kbg
Posts: 84
Joined: Thu Mar 23, 2017 11:33 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Kbg »

USAA has really evolved for sure. Definitely not the organization they used to be which is sad because they were truly an outstanding company with regard to service.

Banking has really become non-competitive, I just have checking with them now. There was a time when I had everything with them. Their app is still pretty good so I feel no compelling reason to change and they do a good job watching for fraud. Better than most has been my experience. Can’t imagine doing any loans or a credit cards with them though.

I haven’t found a company as good for insurance still and I’ve looked. My wife also works in consumer insurance and is definitely not interested in transferring to someone else.
Grinder
Posts: 4
Joined: Sat Sep 26, 2020 11:05 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Grinder »

Soon2BXProgrammer wrote: Wed Oct 07, 2020 1:12 pm
Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
absolute zero
Posts: 692
Joined: Thu Dec 29, 2016 4:59 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by absolute zero »

Grinder wrote: Mon Oct 12, 2020 1:33 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 1:12 pm
Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
DANG! If true then that's a real bummer.
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

Grinder wrote: Mon Oct 12, 2020 1:33 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 1:12 pm
Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
Sigh... well thats too bad... i guess i'll have to consider taking my CC business elsewhere.. but i guess they don't care.. because they probably had been losing money at 2.5% cash back.

prior to the pandemic i've thought about going to the 2.6% BOA CC (needs preferred rewards tier)

https://www.doctorofcredit.com/bank-ame ... ction-fee/
User avatar
baxterbones
Posts: 22
Joined: Thu Mar 28, 2019 9:09 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by baxterbones »

Grinder wrote: Mon Oct 12, 2020 1:33 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 1:12 pm
Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
I hope this isn't true. Is there any more information? Did you just call USAA Credit Card services and the rep provided this info?

This would be the nail in the coffin for my 12 year USAA membership, if true.
Golf maniac
Posts: 661
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Golf maniac »

MBB_Boy wrote: Mon Oct 12, 2020 9:24 am
Golf maniac wrote: Sun Oct 11, 2020 7:25 pm There is SCRA (Servicemembers Civil Relief Act) which protects military members and CRA (Community Reinvestment Act). As a former regulator who spent extensive time in both areas there are problems with both regulations. For SCRA it was a really good idea, however, it was implemented with no way for banks to track who gets these benefits unless the service member discloses their eligibility. The defense department set up a database, but it was not very effective. So for SCRA it is a very difficult law for financial institutions to follow. I could go into any financial institution and find numerous violations.

On CRA it is again a law with good intent. Banks should lend across the community and not discriminate in their lending and investment practices. The intention was to eliminate the old redlining that used to happen. But it is very subjective for the regulator to make a judgment whether the financial institution meets the law. Three different examiners could look at the same institution and come up with 3 different ratings.

So, USAA is just one of many institutions struggling with these regulations. Unfortunately, some regulators are good and find the issues, other regulators not so good and miss these issues for years. I have only used their credit card on the banking side, with no issues. I have used their insurance products for year and found their service outstanding. I wouldn’t decide on using or not using their services based on these issues.
For the CRA, any idea how it's supposed to apply to a direct bank like USAA or Ally? How does geography get determined when there are no branches? :confused
That is a great question. I don’t know for these specific institutions, but I would suspect it is their local area, for USAA that would be San Antonio. For Ally, I think they are in Virginia somewhere. Remember it is not just loans it can be investments.
ofs
Posts: 3
Joined: Sat Aug 31, 2019 3:56 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by ofs »

Kbg wrote: Mon Oct 12, 2020 11:03 am Better than most has been my experience. Can’t imagine doing any loans or a credit cards with them though.
I've been with USAA for 22 years and have only had good experiences. The 2.5% cash back card is outstanding. And their cash back cards make the cash back available within days or weeks.

Our family also had an excellent experience taking out a small RV loan so we could buy a compact MH (also used as a second car) before the kids got too old. Timing worked out perfectly and USAA matched the best rates available.
Grinder wrote: Mon Oct 12, 2020 1:33 pm I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
That's one way to limit public outcry. Hopefully this is just a case of a confused or ill-informed rep.
Soon2BXProgrammer
Posts: 1617
Joined: Mon Nov 24, 2014 11:30 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Soon2BXProgrammer »

Grinder wrote: Mon Oct 12, 2020 1:33 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 1:12 pm
Grinder wrote: Wed Oct 07, 2020 12:43 pm
Soon2BXProgrammer wrote: Wed Oct 07, 2020 9:22 am
Grinder wrote: Wed Oct 07, 2020 9:16 am I received notice that Limitless Cashback was being lowered from 2.5% to 1.5%. Maybe that’s just for me since I pay my bill in full every month LOL!
I have not... did something change with your monthly direct deposit?
Hmmm, I did recently switch my direct deposit from an individual USAA checking to a joint USAA checking with my wife. I can’t remember whether that was before or after the downgrade to 1.5%, I will need to check. The notice just said something like I’m automatically upgraded to a new card with 1.5% cashback.
Hmmm... the terms of the bonus 1% are tied to direct deposit into an account of yours. (terms are slightly more complex)... I'd be interested to know if you changed your direct deposit before you had been notified....
I called USAA today to inquire about this, they informed me that the rewards card was not tied to my direct deposit. The customer service rep said that USAA is canceling this program for everyone and replacing it with a new program that is only 1.5% cashback. They are doing it in batches, and will eventually affect everyone. If it’s true, sorry for the bad news.
Nords wrote:
Nords, have you heard anything about this card behind cancelled?
absolute zero
Posts: 692
Joined: Thu Dec 29, 2016 4:59 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by absolute zero »

I’ve always sort of assumed that the USAA 2.5% card would not last forever, based off the fact that (for me at least) it always listed the 2.5% details under the “special offer” section of the USAA site. Almost like it was their way of hinting that it was a temporary feature.
exarkun
Posts: 30
Joined: Fri May 19, 2017 12:19 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by exarkun »

They're wong about it not being tied to direct deposit. It requires $1000/month in direct deposits to maintain the 2.5%. When you don't meet this requirement you get a message like this.

Hopefully that means they are misinformed and wrong in the rest of their statement...


Thank you for choosing USAA Savings Bank for your credit card needs. We're writing because you're at risk of losing the 2.5% rewards benefit on the USAA Limitless Cashback Rewards credit card.



Why Your Rewards Benefit Is At Risk

To receive this benefit, you're required to make a direct deposit of at least $1,000 (one deposit, not multiple combined) into your USAA checking account every 30 days. This requirement has not been met.



How to Keep Your 2.5% Rewards Benefit

Simply make a direct deposit of at least $1,000 into your USAA checking account and you'll keep your 2.5% rewards benefit. To continue earning the 2.5% rewards benefit, you must have a qualifying direct deposit every 30 days. Otherwise, the benefit will be reduced to 1.5%.



Please use the link below to set up direct deposit, and feel free to call us at 210-531-USAA (8722), our mobile shortcut #8722 or 800-531-8722 if you have questions. We value your business and the opportunity to serve your banking needs.
Kbg
Posts: 84
Joined: Thu Mar 23, 2017 11:33 am

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Kbg »

ofs wrote: Mon Oct 12, 2020 3:05 pm I've been with USAA for 22 years and have only had good experiences.
Over 30 here. I’ll stick with my comment when it comes to lending. For someone with excellent credit they are no longer a competitive lender nor do I invest or keep excess cash with USAA. I didn’t really want to take my business elsewhere, they lost it.
Misenplace
Moderator
Posts: 2906
Joined: Mon Feb 01, 2016 9:46 pm

Re: USAA Bank Gets Failing Grade Over 'Illegal' Practices

Post by Misenplace »

This thread has run its course and is locked (not personal nor actionable). General comment threads are off topic in the forums with "Personal" in the title. See: A reminder that non-investing general comment threads are OT
- It must be personal. In other words, you must be asking about your own situation. You can also ask on behalf of someone specific, such as a family member.

- It must be actionable. You must be able to do something specific with the replies that will make a difference in your situation.
If you have a specific question, please ask directly and provide sufficient information for members to supply appropriate advice.
Locked