The Association of Military Banks of America (AMBA) has partnered with the VA to offer the Veterans Benefits Banking Program (VBBP), providing financial resources and education to unbanked and underbanked veterans.
Established in 1959, AMBA is a not-for-profit association dedicated to advocating for and supporting banks that provide financial products, services, and educational resources to military and veteran communities.
The term “unbanked” refers to individuals who do not use or do not have access to traditional financial services like personal checking or savings accounts, credit cards or personal loans. These individuals use alternative financial services including payday loans, money orders, check cashing services and pawnshops. Similarly, “underbanked” individuals are those who have some type of bank account but also use at least one of these alternative services.
A 2019 Federal Reserve report found that around 22%, or 1 out of 5 adults in the U.S., are either unbanked or underbanked. Veterans make up approximately 250,000 of that number.
According to the Federal Reserve report, people who are unbanked or underbanked are more likely to have a low income, be less educated and belong to a racial or ethnic minority group. Many believe that a paper check is more secure than its electronic counterparts. These barriers and misconceptions can be costly to our veterans – estimates show that an unbanked individual will spend around $40,000 in their lifetime on check cashing fees. These are costs most veterans can’t afford.
To help address this issue, AMBA partnered with the VA to create the Veterans Benefits Banking Program (VBBP). The program’s principal goal is to provide military-focused bank and credit union options to veterans.
The VBBP simplifies choices and helps eligible veterans select financial institutions and services that are right for them. VBBP participant financial institutions understand veterans’ unique financial needs and provide them opportunities to open no or low-fee accounts with a qualified direct deposit. The program also seeks to inform veterans who are receiving their benefits on prepaid cards or paper checks of the availability of better, cheaper, and safer financial products and services. Since VBBP’s inception in 2019, over 150,000 veterans have converted to direct deposit for their benefits.
AMBA and the VA recently expanded the program by launching VBBP 2.0. Partnering with the Association for Financial Counseling & Planning Education (AFCPE) and the National Foundation for Credit Counseling (NFCC), VBBP now also offers veterans access to financial and credit counseling. VetCents, is also available to veterans through a partnership with the Military Family Advisory Network (MFAN). VetCents is a financial education pathway with resources centered around saving, budgeting and home buying.