$64.2M USAA settlement receives initial approval

Update: 

• A North Carolina federal judge granted preliminary approval to a $64 million settlement agreement resolving claims USAA Federal Savings Bank failed to provide service members with reduced interest rates as legally required. 
• The judge determined the proposed settlement, filed Aug. 2, meets all the requirements of Rule 23(e) of the Federal Rules of Civil Procedure.
• A class of USAA customers argued the bank and its subsidiary USAA Savings Bank failed to properly adjust the interest rates on interest-bearing accounts. 
• USAA was accused of violating the Servicemembers Civil Relief Act, the Military Lending Act, the Truth in Lending Act and the bank’s own military benefits program.
• USAA did not admit to any liability in agreeing to the class action settlement. 
• A final approval hearing is set for June 7, 2025. 

USAA insurance veterans class action lawsuit overview:

• Who: Five USAA Federal Savings Bank customers hit the bank with a class action lawsuit.
• Why: The plaintiffs say the bank was meant to provide service members with reduced interest rates but did not.
• Where: The case was filed in North Carolina federal court.

(June 2, 2022)

Five USAA Federal Savings Bank customers hit the bank with a class action lawsuit claiming the bank promised them lower interest rates but did not deliver them. 

In the class action lawsuit filed May 24 in a North Carolina federal court, five USAA customers claim USAA and its subsidiary, USAA Savings Bank, didn’t properly adjust the interest rates on interest-bearing accounts that the customers, who are all current and former service members, had at the bank.

According to the lawsuit, the bank breached its own policies when it failed to give the service members the interest benefits. 

It says the bank’s failure to comply with the Servicemembers Civil Relief Act, the Military Lending Act and the Truth in Lending Act, as well as its own military benefits program, resulted in significant wrongful gain based on the improperly high interest rates charged to service members.

The original lawsuit was filed in November 2021 with four of the five plaintiffs. 

In the original class action, the service members claimed that they all had interest-bearing obligations at the bank that “legally required reduced interest and/or fees benefits from defendants because of an obligor’s military service.”

USAA class action alleges bank statements inaccurate

In the recent allegations, the customers say they received monthly statements from the bank indicating USAA  charged at the correct, reduced interest rate. 

However, in reality, the plaintiffs claim USAA charged them at the higher rates.

The USAA customers said say they’d realized this was happening, they would have taken their business to another bank.

Instead, they paid more in interest and fees than they should have.

“The named plaintiffs in this action represented and protected our nation through military service,” the lawsuit states. “They now seek to represent and protect their fellow servicemembers and veterans through this class action.”

They seem certification of the class action lawsuit, damages, fees, costs and a jury trial.

Meanwhile, USAA faces another class action lawsuit alleging it unfairly profited from the pandemic by overcharging customers for auto insurance. 

What do you think of the allegations in this case? Let us know in the comments! 

The plaintiffs are represented by Knoll D. Lowney and Claire Tonry of Smith & Lowney PLLC and Robert E. Zaytoun, Matthew D. Ballew and John R. Taylor of Zaytoun Ballew & Taylor PLLC.

The USAA Service Member Class Action Lawsuit is Bulls et al. v. USAA Federal Savings Bank et al., Case No. 5:21-cv-00488, in the U.S. District Court for the Eastern District of North Carolina.

Read About More Class Action Lawsuits & Class Action Settlements:

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