Comments on Fidelity Observer: USAA advertising: What the ad didn't mention

USAA owns the bank. USAA doesn't have any shareho...

2008-07-26T11:48:00.000-04:00

USAA owns the bank. USAA doesn't have any shareholders, so they are not obligated to squeeze every penny out of every account/transaction. They certanly have to stay in business, and I think those fees are indeed "nusance" fees to encourage behavior. I've had many bank accounts around the country, and I'll say that USAA's fee structure is probably the best I've encountered.

Mr. Banker, sir (with the wife who has worked at U...

2007-12-26T20:38:00.000-05:00

Mr. Banker, sir (with the wife who has worked at USAA for 3 years):

Who, exactly, owns USAA Federal Savings Bank?

Also - if you are a subscriber to Lord Alfred Keynes maxim about "there being no free lunch", whose paying for all the largess evidenced at the bank?

I can approach this from three different perspecti...

2007-12-20T21:19:00.000-05:00

I can approach this from three different perspectives: I've been a USAA member for over 35 years; I retired from the banking industry (not USAA) after 30+ years; and my wife is a USAA employee on the banking side (for three years).

As to the fees charged relative to the so-called "no fee" account -- it's unreasonable and naive to assume the term "no fee" is inclusive of all checking account-related fees imaginable. No fee for wire transfers out of that checking account? No charge for an NSF check? Of course not!

Nor do I believe USAA owes an explanation everytime they increase a fee. Prices for goods and services increase from time-to-time for any number of reasons. That's the world we live in. We don't expect the grocery store to share their reasons to justify the price hike on a loaf of bread, or a gallon of milk. If we don't like it, we can vote with our wallets: we can chose to pay it, or shop elsewhere, or simply quit buying bread.

As was mentioned, USAA provides good web-based support, including full on-line access to documents related to any product or service one might have with them (including the ability to archive and/or download same). I'm confident the fee structure in some cases is designed to be "punitive;" that is, to discourage members from relying on employees for things the member could easily do for themselves, e.g. photocopies. Kind of like the NSF fees all banks charge -- it doesn't cost that to process an NSF check, but the high charge is to discourage people from bouncing checks.

And to be honest, fee income has become a large part of banks' revenue stream (the NSF fees are BIG money). As a consumer, I agree it's gotten out of hand in some cases, but it is an industry-wide phenomenon that's not going to change anytime soon.

When viewed as a whole (rather than isolating on a single fee here or there) and compared to the rest of the industry, I consider USAA to be among the low-cost providers.

Not perfect, but they've always treated me well -- and having been a "banker guy" myself, I'm a pretty tough audience.

Oh by the way to the blogger that assumes that he ...

2007-12-20T10:08:00.000-05:00

Oh by the way to the blogger that assumes that he knows so much about USAA....our "entitled" retirement pension was taken away!

It's not only rude and insulting that you would su...

2007-12-15T03:12:00.000-05:00

It's not only rude and insulting that you would suggest the employees hired at USAA are not educated, well spoken, and spoiled, but incorrect. Ask me how many times I have been on that company jet. (Here's a hint: less than once.) The fees are insignificant. The customer service we work so very hard to give day-in-day-out goes underappreciated. Not only is it overlooked by [most in] management all the way up, but also by members who bitch over a $5.00 fee. Maybe that extra money will go to my raise next year so that I may rise above the poverty level. Perhaps I will use it to get a proper edjumakashion.

QUIT WRITING IN ALL CAPS, YOU USAA-PAID BLOGGER!!!...

2007-11-20T00:17:00.000-05:00

QUIT WRITING IN ALL CAPS, YOU USAA-PAID BLOGGER!!!

Seriously, are you so lazy that you fail to know when and where to use proper capitalization and punctuation? Oh, sorry, you work at USAA - you probably are still working on your G.E.D.

Here's one reason for the fee increases, which was not mentioned in any of the previous posts: increases in salary and other perqs for executives, as well as paying legacy labor costs, such as pensions for retired employees. What am I talking about?

To begin with, USAA maintains two corporate jets - both Gulfstream 5s, worth around $50 million apiece. If this sounds extravagant, it is; mostly executives but sometimes lower-level employees get to use the corporate jets when a simple ticket on Southwest would do. Executives also receive country club memberships and a fat year-end bonus (anywhere from 50 to 100% of their six-figure salaries, unlike the working-class everyday employees, who get 12 to 15% at best).

Second to the insane salary costs are the legacy retirement costs that USAA is paying and will pay, though they did force retirement on several hundred employees about 7 years ago. But once you have been an employee for a minimum of 5 years, you are entitled to a pension, equal to 1.5% of annual salary for each year employed. So once you hit that 5 year mark, you're guaranteed to bank 7.5% of your salary when you retire. Not bad for a company that claims to put "members" ahead of all else.

Yeah, the customer service may be rated high compared to other companies, but don't forget that it's all subjective - when you compare USAA to BofA, USAA comes across as divine! You can get great customer service from a brow-beaten coolie on the streets of Bangkok, which is about the same kind of working environment you will find at USAA in the call centers.

So, here is one more explanation (really two) as to why USAA is raising its bank rates. Decide for yourself if this Jim Jones definition of "service, loyalty, honesty, integrity" is what you want to reward with your hard-earned dollars, especially if you're in the military. Too bad there's no regs around conduct unbecoming a USAA officer because there is plenty of misconduct at that company to go around.

It's $5. Who cares? You act as though a 400% inc...

2007-04-26T23:53:00.000-04:00

It's $5. Who cares? You act as though a 400% increase from $1 is significant. $5 won't even get you 2 gallons of gas anymore.

I don't dispute that most fees can be avoided, but...

2006-07-12T22:40:00.000-04:00

I don't dispute that most fees can be avoided, but my main problems are:

1) USAA described it as a "no fee" account in the original marketing material, and

2) They've raised fees up to 400%, and never gave any reason for doing so.

For ALL THE BASIC SERVICES OF THE ACCOUNT THERE AR...

2006-07-08T03:43:00.000-04:00

For ALL THE BASIC SERVICES OF THE ACCOUNT THERE ARE ANY FEES, NO FEE TO MAKE A DEBIT PURCHASE, THE OVERDRAFT FEE;S ARE THE LOWEST I'VE SEEN AND USAA IS MOST CERTAINLY THE MOST LENIANT AT REFUNDING THOSE FEES. THERE IS A THING CALLED ELECTRONIC DOCUMENTS WHICH CAN BE STORED ON THE WEBSITE FOR UP TO 2 YEARS FOR FREE, AND YOU COULD SAVE THOSE DOCUMENTS DIRECTLY TO YOUR COMPUTER HARD DRIVE OR TO A DISK AND MAKE ANY AND ALL CHECK OR STATEMENT COPIES YOU WANT. AS FOR RAISING THE FEES FOR FED EX, YOU SHIP SOMETHING FROM FED EX NEXT DAY IT'S GOING TO COST YOU MORE THAN WHAT THEY CHARGE. HOW ABOUT THE INTEREST YOU CAN EARN ON A CHECKING ACCT, HOW ABOUT THE 1/2% CASH BACK FOR CREDIT PURCHASES, FREE WEB BILL PAY, FREE UNLIMITED TRANSFERS TO ADN FROM OUTSIDE OR NON-USAA ACCTS. NO FEE FOR A CREDIT CARD CASH ADVANCE, MOST OFFICAL CHECKS THAT MEMBERS RQST ARE FOR HOME CLOSING SITUATIONS AND IF THAT PERSON WAS TO MAKE A WIRE OF THOSE FUNDS IT WOULD BE $20 NOT $5, OR IF THEY DIDN'T USE USAA TO GET THE CHECK BUT GOT IT FROM ANOTHER INSTITUTION OR CHECK STORE THE FEE WOULD BE A CERTAIN PERCENTAGE AND WOULD MOST LIKELY BE HIGHER THAN $5. I HAVE HAD BANK ACCOUNTS FOR MANY YEARS WITH WELLS FARGO, COMERICA, CHARTER ONE, ARIZONA FEDERAL CREDIT UNION. USAA HAS BY FAR BEEN THE BEST BANK EVER, I HAVE MY LOAN MY CREDIT CARD, MY DAUGHTERS SAVING ACCT, MY CHECKING AND SAVINGS ALL THORUGH USAA. DESPITE FEES FOR CERTAIN THINGS, SOME OF WHICH CAN BE AVOIDED, THERE ARE NO FEES AND IT'S THE BEST DAMN ACCOUNT I'VE HAD.