Treasury scrapped BNY's Direct Express deal before a single card migrated

In November 2024 the Treasury Department's Fiscal Service Bureau named BNY financial agent for Direct Express, the prepaid debit program that delivers federal benefits - Social Security and veterans' payments among them - to about 3.4 million Americans, most of them unbanked. BNY came in 'along with a group of additional new service providers,' with the five-year agreement set to begin in January 2025. Incumbent Comerica, Treasury's Direct Express partner since 2008, agreed to extend its services for three years to allow an orderly transfer.

The migration never happened. 'Due to readiness challenges involving one of the providers, Fiscal Service made the decision to discontinue the agreement,' a BNY spokesperson said. In September 2025, Comerica's CEO confirmed accounts had not yet migrated - 'it's been a bit of business as usual for us' - with Direct Express averaging $3.7 billion in deposits that quarter. That same week Treasury named Fifth Third the new financial agent and issuing bank under a five-year deal beginning immediately, with new enrollment expected in January 2026 and conversions of existing cardholders in mid-2026.

A five-year financial-agent contract over a program serving 3.4 million mostly unbanked Americans, lost before launch

BNY took on the program alongside a group of new service providers, and a year later not one account had moved.

Readiness problems at a single provider were enough for Treasury to discontinue the whole agreement rather than wait.

Direct Express carries lifeline payments, so a stalled transition meant political risk Fiscal Service would not absorb while Comerica stood by.

The prime contractor owns its vendors' readiness: when 'one of the providers' is not ready, the government fires you, not them.

Fifth Third began the five-year term as financial agent in September 2025, keeping Mastercard as the payment network and adding Money Network Financial as program manager, with plans for virtual cards, cardless ATM access and digital wallet integration. Analysts called the sudden award 'a multiyear win' for Fifth Third. Comerica kept servicing existing accounts until cards are reissued.