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Category: 
All Content > Enterprise News Story > Northeast

Title of entry: 
Fundamental breakdown': How USAA landed in regulators' hot seat

Issue or Publication date:
11/21/24

Publication name: 
American Banker

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https://www.americanbanker.com/

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https://www.americanbanker.com/news/fundamental-breakdown-how-usaa-landed-in-regulators-hot-seat

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Entry Essay: 
Over the years, the two reporters at American Banker and the alt-weekly San Antonio Current have written brief updates on USAA’s series of troubles. But in this story, they teamed up to take a comprehensive look at why this storied company has been struggling so much in recent years.
The two brought their respective expertise to this investigation. One is a longtime San Antonio business reporter, whose knowledge of the company’s history, local presence and ties to customers was invaluable. The other has covered bank policy debates in Washington D.C. and tapped a range of analysts, lawyers and former government officials to shed light on USAA’s financial shape and regulatory troubles.
The story was important for three audiences. Readers of the San Antonio Current got a closer look at one of the largest employers in their community — one that has laid off employees as it looks to cut costs. USAA’s nationwide customers, whose ties with the military-focused company are unusually deep, learned that other longtime clients have also grown frustrated with USAA’s once-personalized customer service. And American Banker’s readers got a peek at USAA’s struggles to overhaul its risk and compliance divisions. The experiences that overworked former USAA employees shared were critical, giving banks a playbook for managing regulatory issues more effectively.
As risk-management experts put it, USAA’s bank is suffering from fundamental breakdowns that a series of executive reshufflings has thus far failed to fix. The story tried to leave no leaf unturned, detailing the range of issues regulators have flagged; the bank’s non-existent profits; the turnover at the top of the company; former employees’ experiences; and customers’ growing frustrations. The goal of the story was to paint a comprehensive picture, and fitting all of those into one cohesive narrative that explained key banking concepts to an everyday audience was no easy task.
The story required the reporters to understand USAA’s financials inside and out, including clearly linking how diminished profits at USAA’s bank can turn into a problem for its flagship insurance division. But it also required extensive outreach, both to customers who shared their dissatisfaction and to former employees who worked to repair USAA’s regulatory standing. While a series of messages went unanswered, hearing from both customers and former employees was critical to painting a clear picture of the company’s struggles. Both reporters have already heard from more customers and former employees, partly due to the social media traffic the story received.