The OCC assessed an $85 million civil money penalty against USAA Federal Savings Bank in October 2020 for failure to maintain an effective compliance risk management program resulting in 546 SCRA violations — including wrongful vehicle repossessions and false court affidavits — and 54 Military Lending Act violations, while remediating a January 2019 consent order for the same underlying systems failures.

USAA Federal Savings Bank — OCC $85 Million SCRA and Military Lending Act Penalty (2020)

Outcome: The OCC assessed an $85 million civil money penalty against USAA Federal Savings Bank of San Antonio, Texas on October 14, 2020, for failing to maintain an effective compliance risk management program and IT risk governance program — violations that produced 546 documented SCRA violations against military servicemembers and 54 Military Lending Act violations while the bank was simultaneously supposed to be remediating the same underlying failures under a January 2019 OCC consent order.

USAA Federal Savings Bank, which operates with a mission specifically to serve U.S. military members and their families, was found to have systematically violated two federal statutes specifically designed to protect that same population. The OCC's October 2020 enforcement action identified 546 violations of the Servicemembers Civil Relief Act, including failure to provide SCRA interest rate protections to military reservists, wrongful repossessions of motor vehicles belonging to servicemembers entitled to SCRA protection, and the filing of inaccurate affidavits in default judgment proceedings — a particularly serious category because it involved misleading courts to obtain judgments against servicemembers who should have been legally protected.

The bank also committed 54 violations of the Military Lending Act, specifically for using remotely created checks to collect past-due amounts from members who were "covered borrowers" under the MLA — a practice the statute prohibits. These violations were particularly troubling given that USAA exists specifically to serve the military community and had been under a January 2019 OCC consent order for the same underlying compliance program deficiencies.

The $85 million civil money penalty, paid to the U.S. Treasury, reflected the OCC's assessment that the bank's failures were systemic, compounded an existing consent order, and involved violations of laws specifically designed to protect the bank's core membership population. USAA separately agreed in a later settlement to pay $64.2 million to resolve a class action lawsuit over SCRA, MLA, and TILA overcharges.

Primary Source: OCC Press Release — $85 Million Civil Money Penalty Against USAA Federal Savings Bank (October 2020)