By: Shannon Basile, Director of Compliance
As a continuation of my last blog regarding the Social Security Administration’s (SSA) Representative Payment Program, I wanted to discuss another federal benefit payment program, the Veterans Benefits Administration’s VA Fiduciary Program. Like the SSA’s Representative Payment Program, the VA’s Fiduciary Program will appoint a fiduciary to assist those who are unable to manage their own benefit payments. The VA will only name a fiduciary to handle a beneficiary’s benefit payments after receipt of medical documentation or a court order indicating the beneficiary is unable to handle their own affairs.
Once the VA determines a beneficiary is unable to manage their own payments, it will normally select a friend or family member, often nominated by the beneficiary, to manage the benefit payments on the beneficiary’s behalf. The fiduciary must pass the VA’s investigation including, a criminal background check, credit report review, personal interview, and recommendations of character references. If no family or friends are available to serve as a fiduciary, the VA will look for a qualified individual or organization to fulfill this role.
The VA fiduciary is responsible for managing the beneficiary’s VA benefit payments ensuring the beneficiary’s day to day needs are met and debts are paid. The VA fiduciary has several other responsibilities, including establishing a properly titled bank account as follows: (Beneficiary’s Name), by (Fiduciary’s Name, Federal Fiduciary). Like the SSA’s Representative Payee Program, the VA fiduciary is only authorized to manage the beneficiary’s VA benefit payments. A full list of the VA fiduciary’s responsibilities and information about the application and selection process can be found here.
If a member comes into the credit union asking to establish a VA fiduciary account, in addition to verifying membership eligibility and normal CIP due diligence, the credit union should also request the VA fiduciary’s appointment documents. The account is owned by the VA beneficiary and not the fiduciary so it is important to make sure the account records reference the beneficiary’s name and tax identification number as the owner of the account.
We already know credit unions play a vital role in making sure the communities they serve have access to the financial products and services necessary to achieve financial wellness and fulfill basic needs. Giving VA fiduciaries the ability to establish accounts so they can manage a Veteran’s benefit payments is just another example of credit unions living the mission of people helping people!
The Consumer Financial Protection Bureau’s Managing Someone Else’s Money: Help for Representative Payees and VA Fiduciaries publication is another great resource for information about managing government benefit payments.
Please don’t hesitate to email us at [email protected] or contact your Regional Director if you have questions regarding this blog post.