$64 Million USAA Settlement: Military Members to Receive $20,000 Each in Class Action Lawsuit – Check it Out!

According to The US Sun, USAA Federal Savings Bank has agreed to a $64 million USAA settlement to resolve a class action lawsuit brought by military members. The case which has been ongoing for years involves allegations that the bank charged improper fees and failed to adhere to federal protections for servicemembers. The USAA settlement will benefit over 200,000 military members. Some of them could receive as much as $20,000 each. The lawsuit was initiated by five servicemembers who claimed USAA violated the Servicemembers Civil Relief Act (SCRA) by charging bogus fees and not reducing interest rates as required.

Although USAA maintains it did nothing wrong the bank agreed to settle to avoid a lengthy and costly legal battle. The USAA settlement includes reissuing checks that were previously sent but never cashed. The bank also noted that it has always aimed to provide excellent service to its members and address any errors. The settlement’s $64 million will be split into several parts. Four plaintiffs named in the lawsuit will each receive $20,000. The lawyers representing them will receive up to 27.5% of the total USAA settlement which amounts to $17.7 million. The remaining $33 million will be used to pay members who did not cash their previous checks.

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$64 Million USAA Settlement: Military Members to Receive $20,000 Each in Class Action Lawsuit – Check it Out! (PHOTO: American Banker)

The lawsuit began after USAA was instructed to send remediation checks in 2019 and 2020. Federal agencies claimed the bank had violated the law by not properly compensating its members. Despite paying out these checks the plaintiffs argued that the compensation was insufficient and the documentation was unclear. They also claimed that USAA did not follow proper procedures for reducing interest rates during active duty which is a requirement under federal law. USAA has stated that the USAA settlement is in the best interest of its members allowing the bank to avoid further litigation and focus on delivering high-quality service. The settlement terms were finalized on July 2, 2024 following several rounds of negotiations with former district court judges.

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