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.