US regulator orders USAA Federal Savings Bank to correct unsafe practices

(Reuters) – USAA Federal Savings Bank has been ordered to correct a range of longstanding regulatory deficiencies amounting to unsafe and unsound practices, the U.S. Office of the Comptroller of the Currency (OCC) said on Wednesday.

Problems identified related to management, earnings, information technology, consumer compliance and internal audit and suspicious activity reporting violations, some of which the agency has identified since at least 2019, the office said in a statement.

USAA Federal Savings is part of the United Services Automobile Association, which was founded to provide financial services to members of the U.S. military.

According to the OCC, the order announced Wednesday included parts of prior orders issued in 2019 and 2022 for which USAA was not yet in compliance and directed the bank to improve management of compliance, fraud and third-party risks, as well as risk governance. It also prevents the bank from adding some products and services.

In a statement, the USAA said it was working to address the problems identified.

“Although our progress has not been consistent or swift enough, the bank is well-positioned to complete this work,” it said, adding that its credit ratings, capital and liquidity were “substantially above regulatory requirements.”