After initial backlash, USAA has added a 90-day "pause" in debt collection starting today so that bankers can put stimulus checks to use on more immediate necessities.
Before this announcement, USAA was facing backlash over its lack of mitigation measures. Some banks released statements saying that customers could keep the federal stimulus payments — which includes up to $1,200 per adult and $500 per child living in the household — without having them automatically applied to their outstanding debt.
Initially, USAA did not put such measures in place.
USAA customers started to report that their stimulus payments were going straight to USAA in order to pay toward existing debts owed rather than helping offset the wide range of unexpected financial burdens the virus has put on Americans.
According to The American Prospect, USAA bankers were getting the same generic statement when they tried to contact USAA about their stimulus payments.
"If a balance is owed the deposit will be used to offset the amount owed," the USAA message read. If there is a remaining balance after debts are paid off, that balance goes to the customer.
Now, USAA's pause in debt collection should ensure that bankers are able to use stimulus checks for hardships caused by the virus.
"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," a statement from USAA reads. "This will allow members access to their full stimulus payment to help cover the costs of rent, food, and other important necessities."
This policy will also be applied retroactively to any accounts that had a negative balance at the time stimulus checks were first deposited.
"We understand the challenges our members may face as result of this pandemic," the statement reads. "We are working hard every day to offer solutions that help them make ends meet. These extraordinary times create previously unthinkable challenges. Our commitment to military families, employees, and our communities is to do what we can to help."
Just last week, USAA announced it would be returning $520 million in auto insurance premiums to its members as the pandemic has curtailed most driving.
USAA had not responded to further inquiries from Connecting Vets at the time of this article's publication.
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Reach Elizabeth Howe on Twitter @ECBHowe.
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