Association of Military Banks of America

AMBAGram – Direct Express® (DE) Solicitation

As you may know, AMBA’s partnership with the Department of Veterans Affairs in the Veterans Benefits Banking Program (VBBP) began because a number of very vocal veterans complained about the high incidence of theft and poor customer service they and other veterans experienced with the Treasury’s Direct Express® (DE) debit card program.  The DE program is the Treasury’s only way of electronically transferring benefits to millions of unbanked or underbanked Americans. 

For four years, the VBBP has encouraged unbanked or underbanked veterans to open bank or credit union accounts and to direct the VA to deposit their benefits into those accounts.  So far, the VBBP has been credited with banking over 300,000 veterans.  Many if not most of them have opened accounts at one of the 98 banks and credit unions that participate in the VBBP today.  If your bank is a VBBP participant, thank you for serving our veterans.  If your bank isn’t a VBBP participant, we encourage you to join us.  

Learn more at

I’m writing today to inform you of another opportunity to help us fix the many problems Americans have encountered with the Direct Express® program.  On 13 December 2023, the Department of Treasury, Bureau of Fiscal Service, released a solicitation for applications to financial institutions to become the next DE vendor.  Bottom line up front:  the deadline for applications has been extended to 26 February 2024

As daunting as this sounds, we believe all our AMBA banks are capable of doing a better job implementing this contract than Comerica Bank has.  The key to a bank’s potential success will be its partnership with one of AMBA’s financial technology partners, Moca Financial, Inc.  Many of you know that AMBA sponsors the PATRIOT debit card, powered by Moca.  We believe that the PATRIOT card or a version thereof can provide an interested AMBA bank the leverage it needs to successfully bid on this contract.  

Here’s a synopsis of the DE solicitation:

  • BFS is looking for a financial institution capable of issuing and managing a debit card program with about 4 million cardholders.  Most of the cardholders are Social Security benefit recipients. 
  • My “back of the envelope” math estimates that monthly deposits will in the vicinity of $5B a month.  Most of those deposits, though, will be withdrawn fairly quickly following deposit.  In our experience, the behaviors of Americans who receive their benefits through the DE program prefer to deal in cash, thereby skewing the traditional banking interchange and deposit/loan profit margin models.
  • There are four potential lines of revenue from which the successful bidder can benefit:
  1. Contract payments from the US Government.  We estimate that the current contractor is receiving $30M a year.
  2. Debit card interchange.  As noted above, Comerica discovered early in its tenure that DE cardholders do not fit standard interchange models.  We believe that is due, at least in part, to behaviors developed out of fear of theft from the card and fees associated with use of the current DE debit card beyond the one free ATM withdrawal cardholders receive.
  3. Deposit/loan margins.  Again, as noted above, since deposits don’t remain on the DE card very long, the opportunity for margin profit does not fit standard models.
  4. Cardholder fees.  We believe cardholder fees can be eliminated entirely. If the interested bank agrees, we also believe eliminating cardholder fees will make its bid extremely competitive.
  • Customer call center.  There is a requirement for a robust call center; the volume of calls typically experienced today is listed in the solicitation.
  • Customer Identification Program (CIP).  Although CIP will be necessary, there is a streamlined process whereby current cardholders’ accounts can be transferred with the assistance of the Dallas Federal Reserve Bank.

While this solicitation is intimidating at first glance, we believe Moca Financial has the tools necessary to make this a relatively light lift for an interested bank:

  • The PATRIOT debit card we developed with Moca eliminates almost all of the problems DE cardholders have experienced with Comerica’s debit card.  I’ve attached an annotated version of the solicitation that includes a comparison of the PATRIOT card’s and current DE card’s features.  Since we’ve already talked to BFS about the PATRIOT card and received positive feedback, we believe the card itself will be a compelling feature of any application.
  • Moca has a call center that can handle the required volume of calls.
  • Moca has a digital onboarding process that can assist the interested bank or substitute for the bank’s onboarding process.
  • Moca’s debit card has a funding portal that can be used by government agencies to give them real-time insights into DE cardholder behavior.
  • The Moca card is available in both Visa and MasterCard versions.
  • Last, but not least, AMBA and Moca will assist in the development and drafting of the application.  I have already taken steps to request an extension and hope it will be successful.

With the leverage available in a bank-Moca partnership, we believe any AMBA bank can successfully compete for and execute this contract.  We encourage you to consider this opportunity.  We’ve been waiting for four years to “fix” the DE program; here’s our chance.

If your bank is interested, please email me at  Joe Gurney from Moca and I are intimately familiar with the solicitation.  Not only will we help you draft and submit an application to Treasury, we’ll be happy to arrange a call to answer all your questions.

Annotated Direct Express RFP
Direct Express Program – Financial Agent Selection Process
Request for an extension for submissions (granted on 1/11/2024)