Professor Elam

Thursday Oct 15 2020

Federal banking regulators on Wednesday slapped USAA Federal Savings Bank with an $85 million fine for “violations of law” that were “part of a pattern of misconduct.”

The civil penalty stems from a consent order that the Office of the Comptroller of the Currency, which regulates federally chartered banks, issued in January 2019. The agency tagged USAA Bank for “engaging in unsafe or unsound banking practices.”

The OCC found USAA Bank’s internal controls and information technology systems did not comply with certain guidelines. The bank also failed to implement and maintain a risk management program sufficient for a bank its size.

_________

I must say I am surprised.  USAA is a well run organization. But its banking business has grown quickly now at $100.8 Billion in assets. This seems to follow a pattern. Once a company decides it wants to be the biggest, problems erupt from just that, growing faster than controls can be pput in place.  In the auto world GM VW and Toyota are all examples. JP Morgan Chases fine of $920 M for trading violations is another example.