Through June 2016, USAA had a separate procedure for consumers who notified the Bank of a suspected error concerning a payday loan: Through May 2015, as a matter of policy USAA did not investigate reported errors unless the consumer asserting the error submitted a completed WSUD (written statement of unauthorized debit) within 10 days of USAA sending the consumer the form. On numerous occasions, when consumers notified USAA about suspected errors regarding EFTs that were incorrect, unauthorized, or exceeded the authorization granted by the consumer, USAA failed to promptly initiate Error Resolution Investigations.(Since January 2015, USAA has been able to stop debit card preauthorized EFTs identified by merchants as "recurring.") USAA’s failure to stop payment on debit card Preauthorized EFTs violated section 907(a) of EFTA and section 1005.10(c)(1) of Regulation E. Until January 2015, USAA lacked a systemic mechanism to stop payment of preauthorized EFTs processed via a debit card, and a result, failed to vlock thousands of preauthorized EFTs for which consumers requested stop payment orders.Failure to honor such oral stop payment requests violated section 907(a) of EFTA and section 1005.10(c)(2) of Regulation E. Under EFTA and Regulation E, an oral stop payment request for a Preauthorized EFT is binding on the institution for 14 days. Prior to May 2013, USAA did not consistently honor oral stop payment requests for 14 days.These actions were found to be in violation of section 907(e) of EFTA and section 1005.10(c) of Regulation E. In some of these instances, USAA failed to enter stop payment orders because consumers requested to stop payments to payday loan lenders. On numerous occasions prior to 2015, USAA failed to enter stop payment orders after account holders notified the Bank of their desire to stop payment on Preauthorized EFTs, including by refusing to enter stop payments or by requiring consumers to contact the merchants initiating the EFTs as a prerequisite to implementing stop payment orders.USAA consented to the issuance of the Order by the Bureau without admitting or denying any of the findings of fact or conclusions of law except the facts establishing the Bureau's jurisdiction. Respondent also engaged in unfair acts or practices prohibited under the CFPA by reopening closed consumer deposit accounts in certain circumstances without providing timely notice. The Order states "USAA violated EFTA, its implementing Regulation E, and the CFPA by failing to properly stop Preauthorized Electronic Fund Transfers and failing to initiate and conduct adequate error resolution investigations. The Bureau's Consent Order, issued on January 2, 2019, identifies violations of the Electronic Fund Transfer Act, Regulation E, and the Consumer Financial Protection Act of 2010. The CFPB has announced a settlement with USAA Federal Savings Bank, headquartered in San Antonio, Texas.
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