WASHINGTON — While it is not unusual to see a bank exhort its employees to help lobby on legislation, USAA Federal Savings Bank has taken it one step further by enlisting its 7.2 million customers.
In an email Thursday, Josue Robles Jr., the president and chief executive of the San Antonio-based bank, urged customers to call their senators on the regulatory reform bill. Specifically Robles asked them to request an exemption for USAA from the Volcker Rule, which would ban proprietary trading.
"We are asking all USAA members and employees to urge their U.S. senators to amend a portion of the bill, known as the Volcker Rule, to eliminate its effect on a company like USAA," Robles wrote.
The email argued that the bill, if unchanged, would prevent USAA from managing its portfolio, jeopardize its ability to offer many products and limit its ability to return money to customers.
While most observers said it is rare for a bank to attempt to use its customers as lobbyists, they also agreed it is a tactic that could work.
"Nothing influences a wavering member of Congress more than hearing from his constituents," said Jaret Seiberg, an analyst at Washington Research Group, a division of Concept Capital. "Each constituent who calls is far more effective than a lobbyist visit. The real question is whether a bank can actually rally its customers. I think that's a harder task."
But it may be easier for USAA than other banks. It refers to its customers as "members" and they share a connection to the U.S. military. The bank defended reaching out to its customers, saying it wanted to make them aware of the possible effects of regulatory reform efforts.
"USAA is a unique company and we are owned by our members and our members feel passionately about USAA and we felt it was important for them to know how their association could be impacted," said Roger Wildermuth, a USAA spokesman. "This is an opportunity for constituents who are USAA members, many who are members of the military community, to let them know how one specific aspect of the bill would impact the association they own. We are not talking broadly about the bill. We are just talking about this one provision."
On its website, the bank elaborated on why it views the Volcker Rule as a threat.
According to the site, USAA insurers collect premiums from customers, which the bank, in turns, invests. The bank argues it would have to charge higher premiums on policies and pay less favorable rates if the Volcker Rule were enacted because it would prevent such investments. It is seeking an exemption to the Volcker Rule for all insurers.
"This is not a banking issue," Wildermuth said. "We have no problem with these limits on banks. We're trying to protect the business of insurance and our members shouldn't be penalized because we have integrated solutions by having an affiliated bank."
Some consumer groups cried foul, saying the bank was encouraging its customers to rally against their own interests. If lawmakers received millions of calls on even one issue, they may seek to oppose reform rather than just craft an exemption, said John Taylor, president of the National Community Reinvestment Coalition.
"They may say they are not opposed to the bill, but if they are not equally saying the other parts of the bill are strong their efforts may be taken as opposing the bill," he said.
Comments on the bank's website make it clear that some customers did not appreciate the attempt to enlist their help.
"I'd prefer that USAA stay out of politics," wrote one customer. "I'm going to research this, but I believe the govt plans to regulate banks so they won't use their money in risky investments... It sounds like you, USAA, would like the restriction loosened. I think you should state specifics. What would you like to invest in? Govt securities aren't enough. What is enough? Provide guidelines and maybe I'll address my senator."
Overall, the reaction on the site was mixed, with some supporting the bank's efforts and others clearly frustrated with the bank.
"We are very pleased with the response," Wildermuth said. "We are happy to see members getting engaged and we are happy to see comments of any kind."