USAA denying loans and charging interest to Coast Guard families

Elizabeth Howe
January 04, 2019 - 9:16 am

Photo courtesy of Petty Officer 1st Class Matthew Masaschi

USAA, one of the largest banks serving the military, has a reputation for reliable, loyal service to military personnel and families — which some are saying doesn't seem to include the Coast Guard. 

While the government shutdown isn't affecting the Department of Defense, members of the Coast Guard — who fall under the umbrella of the Department of Homeland Security — don't know when their next paycheck will be coming. Some families are being forced to dip into savings accounts. Others are turning to USAA.

During past shutdowns, USAA has offered zero-interest loans to help military families stay afloat financially until paychecks resume. 

"In the past, USAA has always stepped up and said, 'we're not going to make you go without pay, we will push paychecks through, if you bank with us, we've got you taken care of,'" Coast Guard spouse Lindsay Scott told ABC News. "This time USAA did not."

This time around, loans available through USAA have a 0.01 percent interest rate, payable over 12 months. And they're hard to get, according to Coast Guard spouse Mandie Jarvis. 

"People with credit scores above 700 or 750 are getting denied," Jarvis said. “Anyway, the loan option is a hard credit hit, because they’re doing a credit check on you for an unsecured personal loan.”

Scott was denied a loan despite having "good credit" and said she doesn't know of anyone who has been approved.

Jarvis also told ABC News that she felt this sent the message that USAA doesn't care about the Coast Guard the way they do about other branches of the military. 

“Usually they front the paycheck for active duty military, and when your paycheck gets deposited they get paid back," Jarvis said. "But this time, because [the shutdown] only affects active duty Coast Guard and not the Department of Defense, they’ve come out and said if it affected DOD as well, they would do it.”

USAA made a statement denying any discrimination against the Coast Guard, saying the company's services were redesigned in anticipation of longer and recurring government shutdowns in the coming years.

"We have heard comments that some Coast Guard families feel like we are discriminating against them. This is most certainly not the case," a spokesman from USAA told ABC News.

Still, other Coast Guard spouses are pointing out that USAA is a bank and a business — and the government is the party truly accountable for the situation.

"I’m grateful for what USAA did. They are not perfect, but they do not serve us, they are a business and we can choose to take our business elsewhere," said one Coast Guard spouse who was lucky enough to receive a loan. "We need to be more appreciative when businesses and others want to give back to our community. We need to hold government accountable for services."

In the meantime, Coast Guard families have no choice but to find money where they can while the government shutdown sorts itself out.

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