San Antonio-based USAA Federal Savings Bank has received a failing grade from a bank regulator over evidence of “discriminatory or other illegal credit practices.”
The Office of the Comptroller of the Currency lowered USAA Bank’s overall Community Reinvestment Act performance evaluation rating from “satisfactory” to “needs to improve” after uncovering evidence of 600 violations involving customers.
The CRA, enacted in 1977, requires regulators to assess a bank’s record of helping to meet the credit needs of the community, including in low- and moderate-income neighborhoods.
The OCC found evidence of 546 violations of the Servicemembers Civil Relief Act, including failure to provide protections to military reservists as the act requires, wrongful repossession of vehicles and the filing of “inaccurate” affidavits in default judgments in civil court cases.
The act provides protections for service members in the event their military service impedes their ability to meet financial obligations. Among other things, it protects them from default judgments.
The regulator also found evidence of 54 violations of the Military Lending Act relating to collection of past due amounts from members. The act protects service members and their families from lending practices that could pose a threat to military readiness and hurt service member retention.
“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.”
The OCC oversees all national banks and federal savings associations. It is an independent bureau of the U.S. Treasury Department.