Fifth Third Takes Over Direct Express Program After Comerica's Exit

Fifth Third steps in as Comerica leaves Direct Express. The end of paper checks for federal benefits could fuel program growth.

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2025 October 23 . 8:04 AM

1 min read

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Fifth Third Takes Over Direct Express Program After Comerica's Exit

Fifth Third Bank has assumed control of the Treasury Department's Direct Express program, serving around 3.4 million Americans. The transition comes after Comerica's partnership with the federal government ended due to alleged mismanagement.

The Direct Express program, which distributes federal benefits via prepaid cards, will now be managed by Fifth Third. Comerica will continue handling the program until users receive their new cards from Fifth Third, starting in early 2026. Fifth Third CEO Tim Spence described Direct Express as the 'equivalent of the second-largest neobank in the U.S.', with similar average revenue per customer but significantly better profitability.

Today marks the end of paper checks for federal benefit payments, with Social Security and the IRS fully transitioning to direct deposit and prepaid cards. This shift is expected to boost Direct Express's growth. Last year, the program generated roughly $3.4 billion in deposits for Comerica and is projected to grow at a rate of 5% to 7% by 2026, up from the previously predicted 3% growth rate. Mastercard will continue to serve as the payment network for the program.

Fifth Third Bank has taken over the Direct Express program, marking the end of Comerica's involvement due to alleged mismanagement. The transition is set to begin in early 2026, with Comerica managing the program until then. The shift to digital payments is expected to drive growth in the Direct Express program.