A popular program that has banked thousands now offers financial education and credit counseling.
By Craig Colgan
Four years ago, the Department of Veterans Affairs approached the Association of Military Banks of America with a problem: Too many veterans were unbanked and underbanked.
The VA asked if AMBA would be willing to put together what Steve Lepper, president and CEO of AMBA, calls a financial institution marketplace, to provide veterans options to have their benefits deposited securely. The effort that followed, the Veterans Benefits Banking Program, has served 270,000 veterans. But the success of the effort does not mean the challenge is going away.
“Right now, the VA still tells us they’ve got between 80,000 and 100,000 unbanked veterans,” Lepper says. “It’s like a boat with a hole in it. You keep bailing the water and more water comes in.” To help, the ABA Foundation is partnering with AMBA and serving as the 501(c)(3) fiscal sponsor for the donations that fund the VBBP.
“There are military men and women transitioning all the time out of the military,” Lepper adds. “The PACT ACT has created a huge wave of new claims and many of these veterans are not putting their money into a bank account.” The PACT Act expands VA health care and benefits for veterans exposed to burn pits, Agent Orange and other toxic substances.
Participation in the Veterans Benefits Banking Program is free to any financial institution. The only commitments: Provide a free or low-cost checking account for veterans to direct deposit their VA benefits — and provide assistance to any veteran who may have difficulty opening that account, for any reason, including homelessness or credit issues. “However the bank wants to help the veteran is up to the bank,” Lepper says.
One of the first banks to participate was Wells Fargo. “Wells has been a big supporter of the military for 170 years,” says Bonnie Wallace, SVP and head of financial health philanthropy at Wells Fargo Foundation. “We have a number of our own programs. But it’s difficult to reach veterans.”
One reason is trust, she says. “We find that working with an organization like AMBA and participating in the Veterans Benefit Banking Program gives us some instant credibility,” she adds.
The VBBP is undergoing another upgrade. “It’s not just about connecting veterans to bank accounts,” Wallace says. “They have now layered in the opportunities to receive financial education and credit counseling, through two very reputable organizations. And the results we have seen from that have been incredible. What we are hearing from the veterans is not just that those counseling sessions been transformational, but they want more.” The new financial education platform — dubbed VetCents — was announced earlier this week.
One question that supporters of the program hear frequently is: If my bank has programs that work with veterans already, why look into VBBP?
“If we are trying to bank more veterans and if we want to see more of our customer base be veterans, we have to go find them,” Wallace says. “That’s expensive, from a marketing perspective. As a member of the Veterans Benefit Banking Program, all of that work is done for us. It’s a great channel to bank veterans.”