FinCEN Announces $140 Million Civil Money Penalty against USAA Federal Savings Bank for Violations of the Bank Secrecy Act (2024)

FAQs

FinCEN Announces $140 Million Civil Money Penalty against USAA Federal Savings Bank for Violations of the Bank Secrecy Act? ›

Taken together, USAA FSB will pay a total of $140 million to the U.S. Treasury for its violations, with $80 million representing FinCEN's penalty and $60 million representing the OCC's penalty. FinCEN's Office of Enforcement is responsible for investigating serious violations of the BSA.

USAA owes explanation for fine

It also admitted “that it willfully failed to accurately and timely report thousands of suspicious transactions to FinCEN involving suspicious financial activity by its customers, including customers using personal accounts for apparent criminal activity.”

The plaintiffs claim that USAA denied their insureds' personal injury protection (PIP) and/or medical payment insurance benefits because the company allegedly delegates its insurance claim adjustment to a third party's computer program that arbitrarily reduces or denies these claims.

For example, a person, including a bank employee, willfully violating the BSA or its implementing regulations is subject to a criminal fine of up to $250,000 or five years in prison, or both. 31 USC 5322(a).

No, and that's why the two federal agencies moved to the enforcement stage in March 2022, slapping USAA with civil fines for non-compliance. FinCEN imposed an $80 million fine and the Comptroller of the Currency added $60 million for a total of $140 million.

On July 26, 2019, the Charles Schwab Corporation announced it would acquire USAA's investment management and brokerage accounts for $1.8 billion. The deal with Charles Schwab closed on May 26, 2020.

USAA is owned by its members, who are primarily current and former members of the U.S. armed forces as well as family members of those who served. USAA is headquartered in San Antonio and has been a privately-owned financial institution since its founding in 1922.

USAA blames first annual loss in 100 years on rising inflation, interest rates and weak markets.

USAA MEMBERSHIP WAS EXTENDED TO SPECIAL AGENTS OF THE FEDERAL BUREAU OF INVESTIGATION (FBI) AND SECRET SERVICE (USSS) OFFICERS BECAUSE THEY ARE PROHIBITED FROM HOLDING A COMMISSION IN THE MILITARY RESERVES, RENDERING THEM ELIGIBLE TO RECEIVE USAA MEMBERSHIP.

However, not all financial products offered by USAA are FDIC-insured. The Federal Deposit Insurance Corporation only insures deposit accounts. They do not insure investment products, which can lose value.

Does FinCEN enforce the Bank Secrecy Act? ›

Under the Bank Secrecy Act (BSA), 31 U.S.C. 5311 et seq., and its implementing regulations at 31 C.F.R. Chapter X (formerly 31 C.F.R. Part 103), FinCEN may bring an enforcement action for violations of the reporting, recordkeeping, or other requirements of the BSA.

Warning signs include repeated transactions in amounts just under $10,000 or by different people on the same day in one account, internal transfers between accounts followed by large outlays, and false social security numbers.

Money laundering is an illegal activity that makes large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to look clean.

A check of the BBB website provides a few answers. The failing grade is due to two stated reasons. The first is that the company agreed this year to a $15 million settlement with the U.S. Consumer Financial Protection Bureau over how USAA's banking arm mishandled thousands of personal checking accounts.

A lawsuit filed against USAA by auto insurance policyholder Philip Johnson in California alleges the company has "scored a windfall" of profit throughout the COVID-19 pandemic by continuing to "charge and collect excessive premiums" in 2020 and 2021 despite fewer cars on the road resulting in a decreased number of…

USAA Federal Savings Bank is a federally insured, members-only online bank that offers checking and savings accounts, CDs, credit cards, mortgages and other loans.

Let's start with the bad news. For 2022, USAA reported a net loss of $1.3 billion, its first loss for a full year since 1923 — 100 years ago. Also, USAA said its net worth — basically, the difference between what it owns and what it owes — declined dramatically from $40.1 billion in 2021 to $27.4 billion in 2022.

At USAA, we're dedicated to the financial well-being of our members and their families. We strive to uphold our high corporate and employee standards by using good judgment and common sense in everything we do, and by staying true to our core values of service, loyalty, honesty and integrity.

Highly profitable while conservative with lending, and not publicly traded, the United Services Automobile Association is a model for the financial services industry.