Last month marked a big milestone for the Veterans Benefits Banking Program (VBBP) — more than 50,000 veterans have signed up to receive their monetary benefits through direct deposit since the initiative began a little more than a year ago.
The program is making great progress in getting as many veterans banked (no longer receiving VA funds by check or prepaid card) as possible, said Charles Tapp II, chief financial officer of the Veterans Benefits Administration. The U.S. Department of Veterans Affairs shares this goal with the U.S. Department of Treasury because it guards veterans from fraud and enhances financial literacy, added Tapp.
“We want to make sure that veterans have the resources and funds that they have earned because of their service,” he said.
VBBP launched in December 2019 as a partnership between the VA and the Association of Military Banks of America, a group of banks operating on military installations, after then-VA Under Secretary of Benefits Dr. Paul Lawrence kept hearing feedback about challenges surrounding veterans not being banked. These included checks not arriving in a timely manner and difficulty getting cash with prepaid debit cards.
Read more about the Veterans Benefits Banking Program
Lawrence tasked Tapp and Joe Gurney, senior advisor of fiscal stewardship for the Office of the Under Secretary of Benefits, with devising a productive plan. The VBBP strategy they came up with is two-fold, said Tapp — to supply unbanked vets with military-friendly banks and credit unions willing to work with veterans and offer no- or low-cost banking options, and also to provide fiscal literacy.
“This includes breaking everything down and going over what the different institutions have to offer with people who want to become financially independent so they can accumulate personal wealth and protect it,” explained Tapp.
The numbers show that, so far, VBBP is working. One reason is circumstantial, due to COVID-19, as people no longer want to take their checks to the bank and engage with people, said Tapp. He also attributes the success rate to restoring veterans’ pride.
“Maybe you were a vet who was not traditionally banked because you have had credit challenges. Maybe you made a mistake that resulted in legal actions that made you unable to be banked with a traditional bank. The dignity that is restored when you now have the opportunity to become banked again is certainly something that people have embraced.”
While the VA is proud of the program’s accomplishments thus far, approximately 175,000 veterans and beneficiaries still receive their benefits through a Direct Express pre-paid card or U.S. Treasury-issued paper check.
Tapp said that some people are creatures of habit and “may be used to getting that physical check with lady liberty on the front and making that deposit.” Certain veterans may also may have been no so many times in the past that they assume they are not eligible for the program.
VBBP marketing methods to combat that mentality include a new Public Service Announcement focused on fraud protection, convenience, and cost benefits of using this option to handle the receipt of VA monetary benefits. This supplements other communication mediums such as a social media campaign, letters, monthly postcards, and more.
Tapp said his team wants to reach as many different demographics as possible and is committed to making sure more and more veterans get their money in a quick and reliable manner.
“With natural disasters and some of the challenges that we saw with mail being slowed down over the last year —all of those things can certainly impact someone’s life and cause undue stress, and we believe the direct deposits help mitigate some of those risks that veterans face.”
A full list more than 30 participating banks and credits unions can be found at https://veteransbenefitsbanking.org/.
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