In May 2025, checks started arriving in mailboxes across the country. The sender? USAA—the bank that markets itself as "the military's bank."

The amount? Up to $64.2 million, split among thousands of servicemembers who were illegally overcharged on their loans.

What Happened

USAA Federal Savings Bank agreed to a $64.2 million class action settlement after allegations that it systematically failed to reduce interest rates for military members entitled to protection under the Servicemembers Civil Relief Act (SCRA).

The lawsuit, filed in 2021, claimed that USAA "continually failed to reduce the interest rates service members paid on loans to 6%—a low rate they're eligible for when they're preparing for active duty."

This wasn't a one-time mistake. Court documents reveal that federal regulators—the U.S. Department of Treasury and the Office of the Comptroller of the Currency—had already ordered USAA to mail out checks in 2019 and 2020 for the same violations.

The numbers are staggering:

  • 150,000+ checks sent for SCRA violations
  • 109,000+ additional checks for Military Lending Act violations
  • $64.2 million total settlement

The Pattern of Violations

This wasn't USAA's first offense. Prior to this settlement, USAA had already been fined $85 million after regulators flagged hundreds of SCRA violations during an examination.

The OCC also found discriminatory auto lending practices in USAA's 2022 Community Reinvestment Act exam.

For a bank that built its entire brand on serving military families, the track record is damning.

What This Means for You

If you had loans with USAA while on active duty—especially between 2017 and 2021—you may have been overcharged.

Ask yourself:

  • Did you have auto loans, personal loans, or credit cards with USAA before entering active duty?
  • Were those accounts charged more than 6% interest during your service?
  • Did you submit SCRA paperwork and still see rates above 6%?

If you answered yes to any of these, you may be owed money—whether from this settlement or from filing your own SCRA claim.

The Bigger Problem

USAA isn't alone. According to CFPB research, fewer than 10% of eligible auto loans and fewer than 6% of eligible personal loans actually receive the SCRA rate reduction.

That means 90%+ of military members entitled to the 6% cap aren't getting it.

The reasons vary:

  • Members don't know they're eligible
  • Banks make the process difficult
  • Automated systems don't flag military status
  • Banks simply don't comply

How to Protect Yourself

  1. Check your accounts. Review every loan and credit card you had before entering active duty. Calculate what you paid vs. what you should have paid at 6%.
  2. File SCRA requests. Send written notice with your military orders to every lender. Do this now—even if you think they already applied the rate.
  3. Request retroactive refunds. Under the SCRA, lenders must refund excess interest back to your first day of service. This isn't optional—it's the law.
  4. Document everything. If a lender refuses or delays, file complaints with the CFPB and your state attorney general.

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