USAA Federal Savings Bank failed to address problems with its management, internal audit, information technology, and anti-money laundering compliance that had been subject to earlier enforcement actions, the Office of the Comptroller of the Currency (OCC) said.

This latest order supersedes previous directives from 2019 and 2022, and it focuses on its suspicious activity reporting lapses, but also its overall third-party risk and general risk governance program.

Furthermore, the banking regulator said that USAA failed to meet the OCC’s heightened standards for large banks and ordered enhancements to the bank’s risk governance, compliance risk management, as well as the management of information technology, fraud, and third-party risks. 

According to the OCC’s latest mandate, USAA must submit a detailed action plan to demonstrate compliance with federal banking regulations, and it must formulate risk mitigation strategies for the problem areas that have been identified. The order also curtails the bank’s capacity to launch new products and services and to implement new incentive-based compensation arrangements for its employees. 

The bank has also been ordered not to make any incentive-based compensation payment to any covered individual except as provided in the order. And each year, the bank’s board must review and approve a capital plan that specifically enables it to comply with the bank’s internal risk-based capital limits.

The company issued a statement, saying: “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.” 

USAA Federal Savings Bank is a subsidiary of the United Services Automobile Association and was established specifically to service US military members.