Regular Contributor
I have noticed for the past few months my beloved USAA has adopted the Bank of America model of managing deposits - meaning they sit on the deposit, collecting the interest while the customers wait for the payment to clear. In the past, it has taken as little as 24 hrs for a check to clear, now it takes much longer. This is not a good business practice. I left BoA because they weren't responsible with my money. Now USAA is doing the exact same thing. I am beyond frustrated.

23 REPLIES

Banks do not collect interest on funds waiting to clear, this is incorrect.
A check us just a monetary instrument, funds need to be released and verified before they can release a hold.
I never had that problem, if you have enough assets or a good banking history, checks in full or partial can be given on a relationship basis

Chaun,

 

Checks don't clear instantly, nor does the funds just magically appear in your bank account when you deposit it into your account.  It can take days or longer to actually clear.  If it is a bad check it could take more than a week or two before the bank finds out.

 

In many cases, the bank may front some or all the funds while the check is clearing.  The danger here is that if the check is returned, those fronted funds will be deducted from your account immediately.  

 

Regulation CC and your depository agreement explain hold times on deposited funds. 

After 14 years with USAA I've never had this issue before. Thanks for clearing up the interest part...but that's just semantics. The point is, deposits take longer to post & they bundle transactions together instead of clearing them in order. BoA was sued over this practice & consumers won.

Chaun,

 

The BoA lawsuit concerned overdrafts caused by debit cards and sequencing withdrawals from high to low.  

 

BoA was allowing debit users to overdraft their account and charging them a fee, USAA does not allow overdraft with your debit card.

 

How transactions are processed by USAA is defined in the Depository agreement I linked above.  

 

"Transactions are generally posted each business day in the following order:
• Deposits into the account
• Withdrawals from the account by category (for example, ATM and debit card transactions,
electronic withdrawals, or checks). Within each category, items are generally processed from
lowest amount to highest amount."

 

This is basically the way the lawyer's in the lawsuit argued that transactions should be processed.  It minimizes overdraft/returned check charges.

 

On the note of check deposits posting, if you have had some issues with your account management (late fees, NSF charges), then in accordance with the Depository Agreement deposits can be held longer to minimize financial loss to the bank.

Dear Chaun,

I apologize for the inconvenience this hold has caused you. I would like to get you in touch with a banking specialist who can review your accounts and explain why a hold like this may be happening. If you could please send us a message here with the details you provided above and the best way to reach you, a representative will be in touch shortly.

Thank you

Hello,

I've recently noticed that USAA Insurance checks are from Bank of America; why is that?

Sincerely,

Ivan

 

P.S. I've tried to put the words stated above in the link provided by BrianaHartzellUSAA but it would not go through -- after clicking submit -- so I am asking it here. Same story. I have a check from USAA Auto Insurance that is for about 15 dollars and it says BofA on the bottom left; I want to know what's up with that. I've already confirmed that the check is legit and have already deposited it but the representative didn't know why it was from BofA.

Zeke07 - Thank you for your question, it is common practice for financial institutions to utilize an external bank to issue checks. Also, USAA Federal Savings Bank does not offer commercial banking services so we can remain focused on our individual members. Therefore, we have a long established relationship with Bank of America as our primary disbursement bank. Thanks for your membership and have a great day.

I appreciate your fervor & loyalty to USAA. But as I said before, I've noticed a change & its not in my head. I noticed the same change at BoA & turns out I was correct in thinking something wasn't quite right. I am not the only customer that feels this way.

Your "damage control" for USAA is expected. You should really listen to what your customers care about, though. Your stake in USAA & Customer Satisfaction seem a little unmatched. It is entirely possible for an agent to be proud of their company while caring just as much for a consumer's happiness.

I don't work for USAA, I'm a member just like you.  Unlike BoA, USAA is basically a member owned company.  

 

I haven't seen the behavior your describing and don't fee it is there - but if you do, there are several avenue you can take your complaint, including the Consumer Financial Protection Board or the Better Business Bureau.  You also have the option of taking your business elsewhere.

 

Best of luck to you.