USAA’s Peacock will retire after five years as CEO

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Wayne Peacock, the CEO of military-focused insurer and bank USAA, is retiring next year, the company announced Monday.

His exit follows nearly five years at the helm of San Antonio-based USAA, which maintained a well-known brand in the military community but ran afoul of banking regulators over compliance lapses.

Peacock remains with USAA through the first half of next year, which board chairman Jim Zortman said in a news release “will ensure a smooth transition.” The privately held company is considering internal and external candidates for the CEO job, whose responsibilities include overseeing USAA’s insurance operations and its $111.7 billion-asset bank.

Zortman, a retired Navy vice admiral, said Peacock is “thoughtful and strategic and has never wavered in doing what is right for the association.”

“Thanks to his leadership, USAA is moving in step with the changing needs of the military community and continues to set the bar for member service,” Zortman said in the release.

The announcement did not touch on several compliance issues the company has faced in recent years.

In 2022, the company agreed to pay $140 million for what regulators called “willful” failings to ensure his bank adequately protected itself against money-laundering activity. Regulators have flagged inadequate tracking procedures dating back to 2016.

Last year, USAA Federal Savings Bank received taken in a regulatory exam after supervisors flagged discriminatory practices in its auto lending unit. The issue helped the company earn its second consecutive failing grade on the Community Reinvestment Act exam. Banks typically pass these exams, which are designed to review their track record in the communities they serve.

Both times, USAA received a “must improve” rating, the second lowest available for banks.

The company this month too agreed to settle a class action for $64 million over allegations it overcharged thousands of service members, who are subject to certain interest rate protections. Regulators fined the US $85 million in 2020 due to similar issues, which were behind his first CRA exam failure.

Peacock said after the 2020 fine was announced that the bank “failed to meet our high standards and those of our members and regulators”.

“As we’ve grown rapidly over the past decade, we’ve never wavered in our commitment to serving members,” Peacock said. “However, we have not invested enough in the capabilities and expertise needed to meet regulatory requirements and evolving business needs.”

Peacock, who joined USAA 36 years ago, wrote in a letter to employees Monday that he and his wife envisioned spending three to five years as CEO when he got the job.

“As I approach five years, I’ve decided it’s time to take the next step forward,” he wrote.

Highlights of his mandate included navigating the pandemic, growing the company’s “digital touchpoints” for consumers, growing its member base by nearly a million and “delivering industry-leading service at a rate 96% member retention.

Peacock’s planned departure comes a month after USAA announced other changes to his management team.

The company’s chief financial officer, Jeff Wallace, stepped in as chief audit executive following the departure of the former chief audit executive. Brett Seybold, the former senior financial officer for USAA’s property and casualty businesses, has become the company’s new CFO.