- Key Insight: Fifth Third’s appointment by the Treasury Department reverses its prior selection of BNY and signals a push to modernize Direct Express.
- Supporting Data: The program serves roughly 3.4 million unbanked Americans and has run on Mastercard’s network since 2008.
- Forward Look: Expect expanded digital features over the course of the five-year contract.
Overview bullets generated by AI with editorial review
Fifth Third Bank said Tuesday that the Treasury Department’s Bureau of Fiscal Service has designated the Cincinnati-based lender as the next financial agent for the U.S. government’s Direct Express prepaid debit card program.
The decision marks a reversal from last November, when the Fiscal Service Bureau
A BNY spokesperson said in an email late Tuesday that the New York-based bank was selected in November 2024 “along with a group of additional new service providers,” and that the Fiscal Service Bureau “made the decision to discontinue the agreement” as a result of “readiness challenges involving one of the providers.”
Fifth Third and the Treasury Department did not provide additional comment on the demise of the BNY agreement.
Fifth Third said in a press release that it has reached a five-year agreement with the Fiscal Service Bureau, and that the agreement started on Tuesday. The bureau’s earlier agreement with BNY was also for five years, according to
As of Tuesday evening, the Fiscal Service Bureau had not posted a new press release to its website. But Fifth Third’s own release included a quote from the bureau’s commissioner, Tim Gribben.
“Direct Express plays a critical role in delivering federal benefits payments electronically, especially lifeline payments such as Social Security and Veterans benefits,” Gribben said in Fifth Third’s release.
Gribben, who previously worked at the U.S. Postal Service and the U.S. Small Business Administration, was appointed commissioner of the Fiscal Service Bureau in May 2019, according to the bureau’s website.
Fifth Third said in its release that the Fiscal Service Bureau “determined that Fifth Third has the vision and capability to expand the Direct Express program over the five-year term to deliver compelling mobile applications and digital options designed to provide frictionless value for millions of debit card recipients.”
“This transition marks a step forward in the Fiscal Service’s mission to provide a modern, seamless and secure payment experience for federal benefit recipients,” Fifth Third said.
The Direct Express program provides prepaid debit cards that enable roughly 3.4 million Americans, most of whom do not have a bank account, to receive monthly federal benefits, according to Fifth Third.
The banking unit of the $210 billion-asset Fifth Third Bancorp said in its release that it plans to “offer recipients more freedom and convenience to access federal benefits with new or enhanced solutions such as virtual cards, cardless ATM access, rent and other bill payment services, digital wallet integration and more.”
“We’re focused on delivering secure, high-quality financial services that make banking more accessible for millions of Americans,” said Bridgit Chayt, head of commercial payments at Fifth Third, in the release.
Fifth Third also said that Money Network Financial, LLC, will serve as Direct Express’ program manager, and that the program will continue to run on Mastercard’s network, as it has since 2008.
The Direct Express program faced problems under its previous financial agent, Comerica Bank. Dallas-based Comerica faced allegations that it
Also on Tuesday, Fifth Third disclosed that it recently discovered what it characterized as “alleged fraudulent activity” in connection with a commercial borrower’s asset-backed finance loan, saying that it expects to take a non-cash impairment charge of $170 million-$200 million in the third quarter.
The loan in question has an unpaid principal balance of roughly $200 million, Fifth Third said in a securities filing. The bank added that it “is working with the appropriate law enforcement authorities in connection with this matter.”