Dodd Bill Could Mean Trouble for USAA

Paul Gallagher / April 26, 2010

Sen. Christopher Dodd insists that his financial reform bill is aimed at Wall Street companies. But USAA, the well-known financial-services company for members of the U.S. military and their families, is worried that it will wind up caught in the Dodd bill dragnet.

In a rare move, USAA CEO Joe Robles recently sent an email to each of its members, asking them to contact their representatives in Washington and urge them to make a certain change to the Dodd bill. Specifically, Robles hopes to amend the portion of the bill known as the “Volcker Rule” so that it won’t affect USAA.

As the USAA website notes in a follow-up blog, the Volcker Rule “gives regulators the discretion to limit and prohibit certain investment activities of financial services companies, like USAA. In particular, this bill directs regulators to prohibit government insured depository institutions from engaging in ‘proprietary trading,’ whereby a company trades for its own account.” (more…)