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After seizing stimulus check from disabled veteran with overdrawn account, USAA backtracks on the policy

The San Antonio-based bank reversed course after national media reports

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SAN ANTONIO – While the federal government’s stimulus checks are providing much-needed relief for many Americans, some USAA customers did not see that money hit their account. That’s because the San Antonio-based financial institution was keeping the money sent to some customers who have overdrawn accounts.

But after national media reported on the practice by the bank, which serves current and former military members and their families, the company has now backtracked and paused the collection for negative account balances, according to a statement provided to KSAT by USAA on Thursday.

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“For members with negative deposit account balances, USAA will pause the collection of a negative account balance existing at the time their stimulus payment was deposited for 90 days. This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities," said USAA spokesperson Matthew Hartwig in an email to KSAT. “Beginning as early as today, we will apply this policy retroactively to any member accounts with a negative balance at the time the first stimulus checks were deposited, so that members will have access to their stimulus funds.”

The American Prospect reported on a disabled veteran who was denied his check because of his overdrawn balance.

“According to the wife of the veteran, a USAA representative told her in a phone conversation that they ‘shouldn’t have gotten into debt in the first place,’ and refused to give back the $3,400 CARES Act payment,” David Dayen wrote in his report.

This came after the family had already abandoned the account because they said it fell victim to fraudulent use, but the family did not have sufficient proof to back that up, according to the report.

Another family affected by the policy reportedly showed the newspaper screenshots of a Twitter exchange with a USAA representative on the company’s verified Twitter account.

According to the report, the representative told the family “any deposits to the account will go toward the negative amount owed to the bank.”

More than 16 million people in the United States have applied for unemployment benefits since the coronavirus pandemic began, leaving them unable to pay their bills.

“We understand the challenges our members may face as result of this pandemic,” Hartwig said. “We are working hard every day to offer solutions that help them make ends meet.”

USAA has other assistance and special offers available here.

According to CNN, the coronavirus aid package allowed does not prevent debt collectors from taking stimulus money. The report estimates that a third of Americans could be impacted by the policy.

Millions of Americans could lose stimulus payments to debt collectors

COVID-19, the respiratory disease caused by the new virus, stands for coronavirus disease 2019. The disease first appeared in late 2019 in Wuhan, China, but spread around the world in early 2020, causing the World Health Organization to declare a pandemic in March.

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