The US Office of the Comptroller of the Currency (OCC) has issued a comprehensive cease-and-desist order against USAA Federal Savings Bank, demanding that it correct deficiencies.
This action is a response to practices deemed unsafe or unsound by the OCC, particularly in areas of management, earnings, and information technology.
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The order, which supersedes previous directives from 2019 and 2022, identifies violations in consumer compliance, internal audit, and suspicious activity reporting.
Furthermore, USAA Federal Savings Bank has failed to meet the OCC’s Heightened Standards for large banks as outlined in 12 CFR Part 30, Appendix D.
The OCC’s order consolidates unresolved issues from the past orders and stipulates comprehensive corrective measures.
These include enhancements to risk governance, compliance risk management, and the management of information technology, fraud, and third-party risks.
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By GlobalDataAdditionally, the bank faces restrictions on introducing certain new products and services and on expanding its membership criteria.
USAA Federal Savings Bank is a subsidiary of the United Services Automobile Association, established to serve US military members.
As per the OCC’s latest mandate, USAA must submit a detailed action plan to demonstrate compliance with federal banking regulations. The bank is also tasked with formulating risk mitigation strategies for the identified problem areas. Moreover, the order curtails the bank’s capacity to launch new products and services and to implement new incentive-based compensation arrangements for its employees.
USAA has acknowledged the issues and is working towards resolution, reported Reuters.
“Although our progress has not been consistent or swift enough, the bank is well-positioned to complete this work,” adding that its credit ratings, capital and liquidity were “substantially above regulatory requirements.”
