WASHINGTON, June 27, 2026, 17:04 EDT
- U.S. equity markets stayed closed over the weekend. Fifth Third finished Friday at $56.31, the last quote since it switched its common stock to the NYSE this month.
- Direct Express users are switching over to cards from Fifth Third as Social Security phases out paper checks and requires electronic payments.
- Comerica’s most recent independent first-quarter report lists $3.6 billion in noninterest-bearing average deposits for Direct Express. Card fee income and related expenses were both $28 million.
- A Treasury memo out Friday shows Fifth Third is also part of the federal card-collection rail, where Global Payments acts as acquirer and processor.
Fifth Third Bancorp NYSE:FITB is set to take on a stubborn part of U.S. benefit payments, picking up millions of Direct Express debit-card users as Social Security ends paper checks. Comerica had issued the cards. Now, those accounts are moving to Fifth Third.
Investors are focused on the federal payment flow at stake in the card replacement, not just the story as a retiree service. The core issue: a low-cost deposit base and a fee stream, but heavy servicing costs. If the handoff fails, this customer group could trigger high fraud and spike call-center risk.
Social Security Administration says federal law and Executive Order 14247 demand that all benefits be paid electronically, with the agency planning to finish moving everyone to electronic payments this year. Paper checks are 16 times more likely to be lost, stolen, changed or bounced, SSA said. The Treasury now pays $3.07 to print a check, about 20 times what an automated payment costs.
Fifth Third is set to take over as the new Direct Express financial agent, the SSA said, after Treasury’s Bureau of the Fiscal Service made the selection. New enrollments are expected to start in May 2026. The SSA and Direct Express site said people with existing Comerica-issued cards will be moved later this year or early next year, and should keep using their current cards until getting new ones.
About 3.6 million Direct Express users are affected, according to recent coverage. Fifth Third, after securing the five-year deal, put the program at serving around 3.4 million Americans—mostly people with no bank account. The bank also said 57% depend solely on government benefits.
“Direct Express plays a critical role” in federal benefit payments, according to Fiscal Service Commissioner Tim Gribben in Fifth Third’s statement. Fifth Third’s commercial payments chief Bridgit Chayt said the bank is focused on “secure, high-quality financial services.” Fifth Third Bank
Comerica told investors Direct Express held $3.6 billion in average deposits in the first quarter of 2025, all without interest. It showed $28 million in card fee income and $28 million in program expenses for the quarter, mostly tied to outside processing. Before accounting for any funding value from the deposits, the fee line looked roughly break-even.
The Direct Express book looks more like a funding and scale play than just about card fees. In this rate market, with regionals still chasing stable deposits, holding a pile of noninterest-bearing government-card balances has more value than the limited card income shows.
Fifth Third’s path shifted after it switched financial agents. The bank wrapped up its merger with Comerica on Feb. 2. The deal makes Fifth Third the ninth-largest bank in the U.S. with around $294 billion in assets. Comerica Bank is now part of Fifth Third Bank, Comerica shares have been delisted, and Comerica is listed as a Fifth Third subsidiary, the company said in an SEC filing.
Fifth Third’s current shift isn’t a simple swap between two listed banks. The old Comerica Direct Express business and the new Fifth Third card program are coming together on one platform. Beneficiaries are still getting their payments during the move.
Fifth Third is set to handle more federal card flows, a new Treasury memo shows. Fiscal Service said its Card Acquiring Service, which processes agency credit and debit card collections, will also move to Fifth Third in 2026. Global Payments NYSE:GPN backs Fifth Third as acquirer and processor. This is different from Direct Express, but means Fifth Third will cover both collection and benefit disbursement for federal cards.
Mastercard NYSE:MA is staying on as the Direct Express network partner. Fifth Third says it’s kept that role since Direct Express launched in 2008. The Direct Express website lists Fifth Third Bank as issuer of the new card, under a Mastercard license.
Execution is the concern here. Reuters said in April 2025 that the Consumer Financial Protection Bureau dropped its lawsuit against Comerica. The CFPB had accused the bank of mishandling Direct Express clients before, pointing to cut-off service calls and illegal fees. Comerica wouldn’t comment, and the CFPB said it was doing due diligence with the bank.
Martha Shedden, who leads the National Association of Registered Social Security Analysts, told Kiplinger the end of paper checks is “a consumer protection issue,” not just about new tech. Shedden wrote some of those hit hardest are older people, people living in rural areas, anyone who doesn’t use a bank, and people with cognitive issues. Kiplinger
Fifth Third wants a smooth card rollout to hold on to its federal payments link and keep access to cheap deposits and a wider card-processing network. But if the rollout runs into trouble, that limited group of beneficiaries could end up creating larger service, fraud, and political headaches.
