What Has Happened to USAA

 

Perhaps you’ve seen the ads for USAA featuring Rob Gronkowski as he tries to become a member of USAA. In them he is stymied because he isn’t a Vet, nor related to a Vet.

They are usually funny and tend to drive home how USAA is a company created by military people and specializes in serving military members. Living in San Antonio, USAA dominates a big chunk of the corporate landscape.

They are big sponsors of the Spurs and many events in the area, and they used to be a prime employment destination with their 4-day workweek. When I worked on their campus (as a consultant, never as an employee) they focused on taking care of military members and their families. They used to have an internal motto of, “We go above for those who have gone beyond,” which meant that taking care of military members, especially those deployed, was uppermost in everyone’s mind.

When I was there they had their first CEO Robert Davis, who wasn’t a former General (he had been a helicopter pilot in Vietnam) and he tried to make the company less structured like the Air Force and more traditionally business-structured. He was run off and replaced with a former Air Force General. The culture of serving the military was paramount even if it made them inefficient in other ways.

Over the years USAA has changed. They used to only serve officers, then they opened up to enlisted personnel, then former enlisted. That was when I became eligible since I served in the Reserves and the Guard as a Private. Technically I could’ve joined before that as well because my Dad served in WWII and Korea. I looked into it, but I don’t need the services they provide and my carrier had better rates so I never joined up.

I never thought I would question USAA’s commitment to military values, but as time has passed, I’m starting to. One thing that made me wonder was when I heard that they had debanked John Eastman. Dean Eastman qualified for membership because of his wife’s family, and they had kept some accounts there mostly for personal use — not their primary accounts but backup ones, if you will. Dean Eastman was debanked by Bank of America, which doesn’t surprise me too much as they have also done similar things to companies and individuals in the firearms industry. USAA doing such was a shock though. In a recent article in The Federalist, Chuck Devore (with the Texas Policy Foundation, former California Legislator, and retired Army Lt Colonel) noted that the military, as of 2019, tended to run 59-39 Republican-to-Democrat and yet, as a corporation, it has become more and more woke. From his article:

Of 22 banks and insurance companies headquartered in Texas and rated by the 1792 Exchange, 19 are assessed as having a lower risk of canceling a contract or client due to viewpoint discrimination. One firm was rated as having medium risk. And USAA was one of only two firms that were assessed as a high risk.

The 1792 Project is a watchdog group that assesses companies for ESG and DEI from their website:

1792 Exchange has assessed over 2,900 companies’ policies, practices, and other relevant criteria to determine the likelihood a company will cancel a contract or client, or boycott, divest, or deny services based on viewpoints or beliefs.

How did USAA shift from a company that focused on going the extra mile for its military members into a company that is more focused on politics? The composition of its board gives us a clue.

Of the 10 men and one woman listed on USAA’s executive council, none mentions military service on his or her LinkedIn profile. Given that about 10 percent of American men ages 35-64 are veterans, one would expect to see at least one veteran on the senior management team of a firm that claims, “We’re run by members, for members. And we’re committed to serving the military and their families,” and “USAA was founded on military values.” Instead, we see people who, unless their parents served in the U.S. military, do not personally qualify for USAA insurance due to a lack of a link to military service.

It seems that in spite of the ouster of Davis, their culture truly has changed. Their current CEO is Wayne Peacock, USAA’s first who is not a veteran.

They didn’t have to advertise in the past. If you were an officer you knew of them, and were most likely a member. Even when they opened up to enlisted personnel, advertising wasn’t wide-based. Their brand was their actions, and their actions spoke to who they were and what they did. Today, their ads are all over the place, but their actions appear to still define whether are… it’s just that “who they are” isn’t who they used to be.

Banking is a highly regulated industry, and denying someone the ability to bank is a major issue. To me, there are some core functions of our society that must be available to everyone. Banking is one of those core functions. So is access to communications. So is health care. If the government were to stop regulating banking, then it might be different. We have seen the government using its regulatory powers to attempt to shut down industries that it doesn’t like. I don’t like some of them either, but unless they are illegal, that isn’t the government’s place. Whether it’s porn, or gun sales, or J6 attorneys, when people aren’t doing illegal banking, they shouldn’t have their accounts shut down.

We are left with two strategies. One, we can pressure USAA directly with comments and complaints. The second is that we can look to the government to address this issue. Neither is palatable, nor easy. But if we accede to this affront, then it will get worse. I suppose a third option is to have companies debank prominent people on the Left, and as fun as that sounds for a schadenfreude effect, I doubt the correct lesson would be learned.

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  1. Tex929rr Coolidge
    Tex929rr
    @Tex929rr

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone.  I’ve never used their banking services.  Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.  

    • #1
  2. David C. Broussard Coolidge
    David C. Broussard
    @Dbroussa

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide. 

    • #2
  3. Paul Stinchfield Member
    Paul Stinchfield
    @PaulStinchfield

    USAA? I had to look that up. Please always remember to explain your acronyms for the wider audience.

    • #3
  4. Locke On Member
    Locke On
    @LockeOn

    Thanks for this post. 1792 Exchange just went on my list of investment due diligence sites.

    • #4
  5. Bob Thompson Member
    Bob Thompson
    @BobThompson

    Paul Stinchfield (View Comment):

    USAA? I had to look that up. Please always remember to explain your acronyms for the wider audience.

    This one is much more than an acronym, similar to AAA.

    • #5
  6. Headedwest Coolidge
    Headedwest
    @Headedwest

    I have been a USAA member since 1970. For nearly all that time, I was happy with my membership because even if the rates were not the lowest, the claim process was perfect.

    But, about a year ago, a truck in front of me spit out a rock that took out some paint on the fender and cracked the windshield. USAA harassed the shop to accept lower than standard labor rates, to the point where the shop guys made it clear to me that they were fed up dealing with the company. 

    • #6
  7. Dan Campbell Member
    Dan Campbell
    @DanCampbell

    I have been a member since 1982 when it was officers only.  About 2010 or so they open membership to enlisted retirees, and then a couple years later to anyone who served.  I assumed it was to broaden their membership base because the number of military officers has declines sharply in recent years.

    I used be be a huge USAA supporter.  They were awesome.  They had cheaper insurance rates and paid claims quickly.  I got all my car loans through USAA and did all my finances  through them except banking. 

    Then about 5-6 years ago I started noticing cracks in the façade.  My IRA was shifted to another company.  They stopped doing home loans.  I had a big tangle with them over my home insurance because an agent had not done something she said she was going to do.  Now I have very little confidence in USAA and have transferred everything except insurance to other companies.  That may go too.

    The old “by military for military” mantra seems to have vanished.

    • #7
  8. Tex929rr Coolidge
    Tex929rr
    @Tex929rr

    David C. Broussard (View Comment):

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide.

    I had a trusted local broker price out auto and home insurance, and a couple beat them on price but the annual rebate was way more than the savings.  I’ve noticed if I complain I get much better service; I’ve even sent them a couple of USPS letters which I reserve for when I am truly angry. 

    • #8
  9. Al French Moderator
    Al French
    @AlFrench

    Tex929rr (View Comment):

    David C. Broussard (View Comment):

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide.

    I had a trusted local broker price out auto and home insurance, and a couple beat them on price but the annual rebate was way more than the savings. I’ve noticed if I complain I get much better service; I’ve even sent them a couple of USPS letters which I reserve for when I am truly angry.

    And when you get old. there is an additional senior benefit.

    But…

    I’m told by a friend that the annual rebate doesn’t apply to everyone. He joined because he had Vietnam enlisted service and didn’t get it. I don’t know whether the difference is officer-enlisted or joining while on active duty vs after separation.

    • #9
  10. Al French Moderator
    Al French
    @AlFrench

    Thank you for the informative article.

    I have been a USAA member since joining as an active duty officer in 1969. I have never had a problem with their claims service. I have never compared rates because of inertia. I am not likely to change companies unless I experience a claims problem. Your article will cause me to keep an eye on the company.

    USAA was formed, before WW2, I think, by a group of Army officers, who had difficulty getting insurance because they were moved around a lot. They initially provided only insurance. but began offering banking services sometime after I joined. Because military officers are much more financially responsible that the average person, USAA was able to provide good rates. I was surprised when they decided to open to all enlisted personnel. I suspect that, somewhere along the line, they just decided they wanted to become a powerful financial institution. That probably happened as they transitioned from an all military board to an all civilian one.

    • #10
  11. She Member
    She
    @She

    I got an text alert the other day that they’ve gone woke. They’re going broke, too.  At least, they’re losing money.

    • #11
  12. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    We use them for insurance ( through Linda). Have been very happy with that sor far. 

    Not happy with their woke direction, but hear too many horror stories in insurance. Our roof guy says they are the best as far as he is concerned.

    • #12
  13. The Cloaked Gaijin Member
    The Cloaked Gaijin
    @TheCloakedGaijin

    Dan Campbell (View Comment):

    They stopped doing home loans.

    I know that they were doing home loans as recently as last August.

    Their website still mentions home loans.

    (If they are losing money, perhaps they need to advertise less — and improve their business.)

    • #13
  14. Dan Campbell Member
    Dan Campbell
    @DanCampbell

    The Cloaked Gaijin (View Comment):

    Dan Campbell (View Comment):

    They stopped doing home loans.

    I know that they were doing home loans as recently as last August.

    Their website still mentions home loans.

    (If they are losing money, perhaps they need to advertise less — and improve their business.)

    About 3 years ago I tried to get a loan for a major addition to my house.  My original mortgage is paid off.  I was told they don’t do mortgages anymore.  The most they would do was a $20k personal loan.  

    • #14
  15. Lunchbox Gerald Coolidge
    Lunchbox Gerald
    @Jose

    I’ve dealt with USAA once, in 1986, when their client forgot he was driving in England and hit my car head on.

    I made a claim against them.  Their adjuster would only come to my area next Thursday.  Oops, that was Christmas.  Well, he’d be there next week. Oh, that was New Years day.  See you next week.  I waited 3 weeks for the guy just to show up and view my totaled car. I’ve never been a fan.  And less so now.

    • #15
  16. kedavis Coolidge
    kedavis
    @kedavis

    Dan Campbell (View Comment):

    The Cloaked Gaijin (View Comment):

    Dan Campbell (View Comment):

    They stopped doing home loans.

    I know that they were doing home loans as recently as last August.

    Their website still mentions home loans.

    (If they are losing money, perhaps they need to advertise less — and improve their business.)

    About 3 years ago I tried to get a loan for a major addition to my house. My original mortgage is paid off. I was told they don’t do mortgages anymore. The most they would do was a $20k personal loan.

    Whether someone offers mortgages varies by state.  It’s possible they stopped doing mortgages in your state, over 3 years ago, but still offer mortgages in other states.

    • #16
  17. Bunsen Coolidge
    Bunsen
    @Bunsen

    I have been a member since 1992 (graduated college and joined based on my father’s 82nd Airborne service and membership).  In the past 4 years their service has gone way down.  I almost left them after our last claim (farmed us out to a third party who could have cared less about us).  After reading the Federalist article, I am out.  We are moving to a community bank and will be talking to a insurance broker friend of mine for our insurance.  I always knew they could be (and usually were) more expensive than the mainline insurance companies but their service was beyond compare.

    Good bye USAA.

    • #17
  18. Skyler Coolidge
    Skyler
    @Skyler

    I’ve been a client since I first learned to drive.  

    Nowadays they cover my home insurance.  

    Whenever I meet someone with USAA auto insurance, I thank them for subsidizing my driving habits.  They don’t cover my driving anymore.  For the second time.  Maybe they’ll take me back again.  One can dream.

    • #18
  19. Stad Coolidge
    Stad
    @Stad

    David C. Broussard (View Comment):

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide.

    I’ve been with USAA for over 40 years.  Yes, they are more expensive than a lot of other insurance companies, but their service is top notch and worth it if you can afford it . . .

    • #19
  20. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    Stad (View Comment):

    David C. Broussard (View Comment):

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide.

    I’ve been with USAA for over 40 years. Yes, they are more expensive than a lot of other insurance companies, but their service is top notch and worth it if you can afford it . . .

    And, according to Gallup, they have one of the highest customer service ratings of anyone in the world. 

    • #20
  21. David C. Broussard Coolidge
    David C. Broussard
    @Dbroussa

    Paul Stinchfield (View Comment):

    USAA? I had to look that up. Please always remember to explain your acronyms for the wider audience.

    It is the name of the company.  Yes, they have a longer name behind that moniker, but I honestly don’t know what it is.

    • #21
  22. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    David C. Broussard (View Comment):

    Paul Stinchfield (View Comment):

    USAA? I had to look that up. Please always remember to explain your acronyms for the wider audience.

    It is the name of the company. Yes, they have a longer name behind that moniker, but I honestly don’t know what it is.

    Yeah, That is like having to explain AAA these days. 

    GEICO stands for something too. 

    BTW: United Services Automobile Association

    • #22
  23. Locke On Member
    Locke On
    @LockeOn

    Bryan G. Stephens (View Comment):
    GEICO stands for something too. 

    Government Employees Insurance Co. And if you look at their political and other donations, they are wokesters, as you’d expect with that clientele.

    • #23
  24. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    USAA just agreed to replace my roof for wind damage.

    • #24
  25. Headedwest Coolidge
    Headedwest
    @Headedwest

    Bryan G. Stephens (View Comment):

    USAA just agreed to replace my roof for wind damage.

    I got a new roof from them just over a year ago (hail damage). In contrast to the last car claim, this one worked like a champ.

    • #25
  26. kedavis Coolidge
    kedavis
    @kedavis

    Headedwest (View Comment):

    Bryan G. Stephens (View Comment):

    USAA just agreed to replace my roof for wind damage.

    I got a new roof from them just over a year ago (hail damage). In contrast to the last car claim, this one worked like a champ.

    My roof was replaced due to storm damage two years ago, by National Summit, previously National Lloyds.  Something over 5,000 square feet.  They did fine by me too, and my premiums are quite reasonable especially considering what I hear from other areas, especially California and Florida.

    • #26
  27. Skyler Coolidge
    Skyler
    @Skyler

    Stad (View Comment):

    David C. Broussard (View Comment):

    Tex929rr (View Comment):

    I’ve been with them since 1979, and if they still weren’t cheaper for home and auto insurance I’d be gone. I’ve never used their banking services. Among our cohort of veteran friends their reputation has dropped hard over the last twenty years or so.

    Oddly when I looked at switching insurance to them, they were much more expensive than Nationwide.

    I’ve been with USAA for over 40 years. Yes, they are more expensive than a lot of other insurance companies, but their service is top notch and worth it if you can afford it . . .

    Thank  you for subsidizing my driving habit.  :)

    • #27
  28. JustmeinAZ Member
    JustmeinAZ
    @JustmeinAZ

    I’ve been a member for 30 plus years and so far have had outstanding service. I have my home, car and Medicare supplement through them. Many times a health care provider will not recognize who they are but they pay in a timely manner.

    • #28
  29. Skyler Coolidge
    Skyler
    @Skyler

    JustmeinAZ (View Comment):

    I’ve been a member for 30 plus years and so far have had outstanding service. I have my home, car and Medicare supplement through them. Many times a health care provider will not recognize who they are but they pay in a timely manner.

    I’ve been a member for 45 years.  Thank you for subsidizing my driving habits.  :)

    • #29
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