Government shutdowns have happened before, and companies such as San Antonio-based USAA have worked to ease the burden on federal employees who miss paychecks.
However, USAA is not providing that same safety net for its customers during the current shutdown, prompting anger from some who are vowing to take their business elsewhere.
“Your bank was established to help veterans,” Anchorage, Alaska, resident Rickey Starr posted in a letter to the company on Facebook. “I am a veteran, [disabled] veteran, who’s income is illegally suspended. The promise you made to veterans has been repeated multiple times from my lips, encouraging many people to your bank. I believed in your promise, and now realize it was nothing more than false advertising.”
Members of the Coast Guard, which is part of the federal Department of Homeland Security, are required to keep working through the shutdown because of the vital nature of their service. But they are at risk of not being able to make payments on mortgages, car loans, and other recurring debt because they’re not being paid. Until the government reopens or lawmakers push through a bill that would allow them to be paid during the shutdown, members of the Coast Guard will go unpaid.
In the past, USAA has stepped in during government shutdowns and offered furloughed federal employees and people in special circumstances such as Coast Guard members no-interest loans to cover expenses until paychecks come and USAA can be reimbursed.
USAA is not offering those no-interest loans this time around while competitors such as Navy Federal Credit are continuing the practice.
A USAA spokesman was not available when asked for comment on Tuesday, but the company confirmed via a text message that details of a report by ABC News on the loans were accurate.
In that report, USAA said it had decided to offer members a one-time loan at a 0.01 percent interest rate, payable over 12 months instead of the no-interest loans it had made available in past shutdowns. The company said it made the change to plan for longer and reoccurring government shutdowns.
USAA has so far refused to say how many applications for those loans it has received and what the requirements are to receive them. The company also posted explanations for its policy change on its social media accounts this week.
“USAA is committed to helping all of our members when they need us most,” the company said in a Twitter post. “In light of recurring and potentially prolonged shutdowns, we are offering a low-interest loan that provides below-market rates and is subject to an underwriting review.”
Sen. John Thune (R-South Dakota) introduced the “Pay Our Coast Guard Act” last week but even if that measure became law during this shutdown, some furloughed government workers would continue to have trouble paying their bills until the government reopens and paychecks are issued.
Alice Veksler identified herself as a member of a Coast Guard family in a Facebook post to USAA asking the company for more transparency in regard to what is required to receive one of the new loans. She said her family and others she knew with good credit were being denied the loans.
“It seems that it is very difficult for those most significantly affected to receive any help with this loan program,” Veksler wrote. “Can you provide some transparency with respect to who can actually get a loan?”
USAA responded by asking Veksler to call an 800 number.
This is the second high-profile customer relations misstep for USAA’s banking operation in the past week. Last week, the Consumer Financial Protection Bureau issued a consent order detailing how the company violated banking and consumer protection laws in recent years, with USAA agreeing to pay $15.5 million in a settlement.
So disappointed to learn of yet another problem at USAA –
Ok, so are we talking about one tenth of one percent, versus zero? As in, one dollar on ten thousand dollars? It is really very small. I understand the principle of the matter (no pun intended), but it is still a very small amount.
They are only offering it to active duty coast guard and NOAA and not to any other members who are civilians, regardless of veterans status. Very different from past shutdowns.
well, they aren’t including US Public Healthcare Service but they are NOAA?
I called as well. Long time member. When this is over I am moving to Navy Fed. I’m done with this organization. They no longer stand for what they say they stand for. Share this article as far and wide as possible.
According to NFCU website you may not have to wait until this is over. They are encouraging non-members to call their toll free number or visit a local branch to discuss options.
http://www.navyfederal.org/about/government-shutdown.php
Wrong. PHS is included.
Is there a math error in the article? The stated 0.01 percent rate means 1/100 of a percent. Did USAA really mean 1%? If it is truly 0.01%, then it seems questionable whether the rate is worth the bad will and why anyone would object to it. Even if you borrowed $100,000 to cover expenses while being off work, it would only cost $10 at the end of the year at the rate of 0.01%!! But at 1% it would cost $1000 and be worth implementing and questioning.
From the San Antonio Express-News: “The special loans USAA is offering to eligible Coast Guard and NOAA employees carry an interest rate of 0.26 percent, though it drops to 0.01 percent on auto-payment plan. Credit approvals are required.”
We are affected by the shutdown as well, when I called USAA bank they did not help us at all, instead told me that they can hold off the payment only for one week then we have to pay our bills or it will add interest. That is such a rip off when we are in need of help.
Dansktex it would be a wonderful rate- but it is only available to active members of the coast guard, or noaa. All other federal employees are not eligible for the special rate.
The biggest rub to me is that USAA decided to offer a “relief package” for a specific event (not unlike offering special financing to victims of hurricanes and other natural disasters outside of the victims’ control)…this govt shutdown is a disaster outside of our control. However, rather than offering this to ALL USAA members affected by this situation, they have failed the loyal membership by not providing information and turning the majority away. How would they look if they showed up after KATRINA, or the more recent hurricanes, and when a USAA member applied for whatever relief was being offered was told “sorry only active duty military need apply”…this isn’t an active duty only credit union. After almost 40 years with USAA and being a vocal advocate; I am now looking elsewhere and will encourage others to do the same…very disappointed in USAA and feeling duped for holding this company is such high regard for all these years. This could’ve been a now cost PR win, like the NFCU is enjoying …. very sad
I agree whole heartedly. My experience while trying to determine how USAA could help me during this crisis is outlined below. I imagine many people will be switching banks when this is all over.
Long post. TLDR: USAA is about to lose a bunch of members to Navyfederal Credit union.
I’ve been a USAA customer since 2004 when I was an active duty Army soldier stationed in Maryland. They’ve always treated me very well and fairly. Their products have been top-notch and over time, I have slowly turned to them for nearly all of my banking and financial management needs.
I and my wife currently work for the federal government, each in a different affected agency. She is non-excepted (furloughed) while I am excepted (working for no pay). I waited as long as I could to reach out about securing assistance due to the current government shutdown. After hearing about a number of other banks that were helping their members navigate the individual crises the shutdown has created by offering 0% interest loans, I assumed USAA would be doing the same.
I was wrong.
USAA is only offering low interest loans to their current active duty coast guard members. Though most of their membership are veterans of all the branches of service and I imagine a large portion of their membership is still serving as public servants in the federal government. Even those low interest loans for the coasties come with a catch – a hard pull on their credit, which can have a hugely detrimental effect on credit scores. And most people are (apparently) being denied that loan.
I have a few major problems with USAA right now, despite having banked with them for as long as I have, and in the past, having been a vocal supporter of theirs.
#1. They are deliberately discriminating against a sub portion of their membership by singling out the coast guard members as the only members worthy of the low interest loans. It’s like telling their other public service members (again, most of whom are veterans) that they are lower priority, or worse, not a priority at all.
#2. They are only offering this one-time low interest loan. With the detrimental effect it will have on their members credit score. That means, even if they did decide to include all of their members in the offer, if the shutdown lasts a long time, their members will still have to find additional funds or methods of coping for long-term financial stability.
#3. This one is the kicker. I called to find out what my options were for securing a loan – as non-coast guard, dual income federal workers both affected by this shutdown. When I was discussing the situation with the customer service representative, I pointed out much of what I’ve written here and what I felt was inequitable treatment of their diverse members. The representative brushed off my criticism blithely noting that “it’s not OUR fault you’re not getting paid.” Hardly a good way of keeping your most loyal members.
All of this isn’t to say it’s not well within their rights to offer products and services that make sense for their business. But as a company that supposedly prides itself on proudly serving those who serve(ed) I’m finding all of their advertising a lot disingenuous. For instance, on their homepage they write much about their commitment to service and to their members, even writing “when you join USAA, you become part of a family that stands by you during every stage of your life.”
They need to amend that to say “except in the case of a government shutdown…it’s not OUR fault you’re not getting paid.”
I’ve decided to take my business to Navy Federal Credit Union! My peers who are with NFCU are not having these problems.
What about us civilians? Why are we to feel shunned. We are being affected just the same, and there is no help. How am I supposed to recover when I live paycheck to paycheck.
Seems like USAA may have a problem with TRUMP being our President! All in my family are USAA members. I learned a year or so ago that USAA were extending service to those outside the military and began to questions as to WHY and WHO decided to STIRR THE POT… not that I have an issue with extending service to non veterans, but it smells like politics to me and not good business sense.
I’m thoroughly confused as to who gets what when! It is a nice gesture by USAA but apparently now well thought out.
Leaving the “bank” as soon as this is over. I have been a “member” for more than 20 years and I am done with their depreciating value. I am guessing we will get customer service from India soon. A former great company gone bad.
I’ve been with USAA for over 30 years and a civilian with the federal government for 27 years. I am part of the DOJ and must continue working which goes unfunded without pay for the shut down. I called USAA for assistance and what is the best they can do: $10,000 loan at 9% interest
Trump holds the budget hostage with his nonsense physical wall and the same folks that voted him in are blaming USAA. Maybe this sound logic is why you live paycheck to paycheck.
Its not just Trump its all of Congress as well. Seems our government can’t find a way to work together. I bet if Congress wasn’t getting paid this would end much sooner
As a government employee, shouldn’t you plan for the possibility for a government shutdown, and have an emergency fund to cover expenses. As a civilian, I have to have one in the event of a job loss. I appreciate everyone’s military service, but we have been told since we were kids to save money and have 3 to 6 months of expenses in an emergency fund.
Most civil service people I know are putting their money into the 401k fund, but not a lot actually have cash savings. But thanks for pointing out the importance of an emergency fund, I am sure that everyone is saying ‘Boy, what a smart bastard that person is!” right about now.
I was thinking the same thing as well as pretentious!!
The biggest issue with this loan is that it now requires a credit check and approval to borrow exactly what has been getting deposited into our USAA checking accounts for decades. After 20 years of this company receiving my direct deposit I was denied a loan to cover the paycheck that will be delayed. Previously they followed the same policy that Navy Federal has. If your direct deposit goes in their bank, you qualify for the loan. This is no longer the case with USAA.
The United States Public Health Service (USPHS) Commissioned Corps and NOAA also must work and may not receive a paycheck depending on the funding status of the agency that they are assigned to.
Regarding USAA, we too got turned down for a loan. So the next step would be to maybe ask for something easy (in my opinion). We wanted to know if they would be willing to defer our auto loan payment until the shutdown resumed. We got a spiel about how they could only defer one payment within a 12 month period, and there was nothing further they could do if the shutdown extended past that. Looks like we will be changing banks after paychecks resume.
Exactly what I was told about my auto loan. I have already driven down to and opened a new account at my local Navy Fed Credit union. I understand that they cannot help me with the present shut down. And same here….I will be closing my car loan with usaa once the money flow again and my direct deposit.
My wife did the same thing yesterday. We are moving ALL our banking from Wells Fargo and USAA to Navy Fed! They appreciate “service” in all ways vs. just giving it lip service like WF and USAA!
I find it very disheartening that USAA would treat its customers like this. My husband works for Department of Homeland Security, and is currently furloughed. He called USAA to ask about what options are available and they brushed him off because he’s not Coast Guard. We have banked with them for YEARS, never been late on loans, we have all our auto insurance and renter’s insurance through them. We don’t default. We had to get a new (to us) car last month and financed through them. The good history built is worth nothing. I’m going to think again before I recommend friends and family banking with them. This is such a time of uncertainty and to have been told by countless others that USAA has always come through in the past, not to worry – those words are meaningless now. We are expecting our first child, living on my part-time income and what income my husband can now bring in driving for a ride-share company. I really wish in this moment we had Navy Federal, where they seemingly take care of their people.
Im on my way to Navy Fed credit union. 39 years with usaa, we are not family anymore.
Called for help and was told I qualify for a loan at 8%, credit score is 804 and this thr best they can do for this fed worker and very long time member.