- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Jaclyn Jaeger2024-12-06T12:45:00
A defamation lawsuit filed by a whistleblower against USAA, which a Florida judge recently dismissed on a technicality, revealed in public court records an estimated 400,000 violations of the Military Lending Act (MLA) by USAA Federal Savings Bank (USAA Bank), an indirect wholly owned subsidiary of USAA.
The estimated scope of the MLA violations was first reported in a three-part investigative series by Compliance Week in May 2022. Lenn Ferrer, a former USAA director of compliance turned whistleblower, told Compliance Week that senior executives at USAA ignored warnings from compliance staff and third-party consultants for years regarding numerous violations of U.S. federal banking laws and “intentionally” hid from regulatory authorities the true scope of its illegal practices, including the MLA violations, violations of the Servicemembers Civil Relief Act (SCRA), and various consumer lending laws.
“From the beginning, I have done nothing other than tell the truth and try to do the right thing,” said Ferrer, after filing his defamation lawsuit against USAA.
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USAA Federal Savings Bank has been hit with its third cease and desist order from the Treasury Department’s Office of the Comptroller of the Currency in the past five years for failing to correct unsafe and unsound banking practices.
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