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Veterans, Military and Their Families

 

New VA Program Helps Veterans Get Bank Accounts to Receive Benefits

An estimated 175,000 vets in need of secure direct deposit of payments

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Each year 1.6 million lost, stolen or delayed paper checks from the federal government go uncashed to beneficiaries. For the veterans enrolled in Department of Veterans Affairs (VA) programs, missing a benefit payment can be detrimental to their health and well-being. To alleviate this problem, the VA created a new program, the Veterans Benefits Banking Program (VBBP), to help an estimated 175,000 veterans obtain a bank account and start receiving their payments electronically via direct deposit.

AARP spoke with Charles Tapp II, chief financial officer of the Veterans Benefits Administration, to get a better understanding of how the program works. His responses have been condensed and edited for clarity.

What makes direct deposit a safer payment option?

Direct deposit or electronic funds transfer (EFT) is a safer option because it allows payments to come through routinely without disruption, even if there’s a natural disaster. It also prevents checks from being delayed in the mail or stolen before it’s cashed. We see the program as a safety mechanism to make sure that our beneficiaries receive their full benefits as they use a traditional bank account or credit union, instead of relying on check cashing services, which charge exorbitant fees.

Who is eligible to participate in the VBBP?

Any veteran with a DD-214 (report of separation) or beneficiary who receives cash benefits from the VA.

How can you sign up for the program?

If you visit the VBBP’s website you will find a list of over 30 banks and credit unions to choose from. Once you choose a bank or credit union, you will be directed to its individual webpage. Each financial institution has its own criteria for signing up. Veterans or beneficiaries who have additional questions may call VA at 800-827-1000.

Servicemembers may also visit a participating bank in person and mention the VBBP to enroll.


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Should veterans be worried about being denied a bank account?

The institutions who agreed to participate in the program have agreed to work with veterans who may have a low credit score, legal issues, or homelessness. However, each bank or credit union has its own unique and specific criteria.

Why is it important to have a bank account?

We believe it’s safe from the perspective of getting your payments on time, every time. We believe it is safer because if there’s any instances of fraud, the banks are federally insured to protect the consumer.

Outside of receiving benefits via direct deposit, are there other benefits the program offers?

The participating banks and credit unions have committed to working with veterans and beneficiaries to provide financial literacy, insights and information. In addition to helping you get set up with your bank account, they are also there to help with other financial tools and resources available, such as savings accounts, certificates of deposits (CDs) or instruction on how to use your bank card safely.

What does this mean for older veterans?

We are very conscious that older populations or those who have historically received checks long-term may have forgotten to include their electronic funds transfer when they first signed up for their benefit. By and large we’re starting to get the older population who are receiving traditional checks or Direct Express Cards to start receiving electronic payments.

Why should a veteran open an account through VBBP instead of going directly to a bank?

Actually, we encourage you to do both. We’re not trying to supersede veterans’ options to go to a traditional bank on their own. We’re doing it to make sure that veterans have options. If a veteran has a bank of their choice we highly encourage them to go to that bank and get signed up for direct deposit.

Are there concerns about fraudsters posing as VBBP?

We are directing people to the website. We’re not asking them to take a blind advertisement saying VBBP. Our website will take them to the list of financial institutions that are safe and are properly insured at the federal level.

Aaron Kassraie writes about issues important to military veterans and their families for AARP. He also serves as a general assignment reporter. Kassraie previously covered U.S. foreign policy as a correspondent for the Kuwait News Agency’s Washington bureau and worked in news gathering for USA Today and Al Jazeera English.

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