Bank of New York is expected to be chosen by the Treasury Department to take over a lucrative government contract previously held by Comerica Bank to operate the Direct Express debit card program serving unbanked and underbanked government beneficiaries, sources said.

Though Bank of New York, the nation's oldest bank, is not a retail bank, it has been making a push into faster payments and laying the groundwork to expand payments to the underbanked. With the contract, BNY gains a free liquidity source of more than $3 billion in deposits a month. The New York-based bank dropped the word "Mellon," from its name last month .

Last year BNY formed an alliance with MoCaFi, a Black-founded fintech platform, to provide payments through BNY's Vaia platform, which allows governments and corporate users to send disaster relief, financial aid and employee payroll payments to consumers who are underbanked.

In 2021, BNY took part in the Treasury's financial agent mentor-protege program by expanding its relationship with Optus Bank, a $350 million-asset bank in Columbia, S.C. At the time, it gave Optus $3 million to supplement the institution's investments in low- and moderate-Income  communities.

The Treasury did not respond to a request for comment. BNY declined to comment.

BNY executives also have said that the best way to close the income gap is to make long-term investments in underserved communities and to form unique partnerships. BNY is expected to offer FDIC-insured bank accounts, debit cards and credit reporting services to Direct Express consumers through the MoCaFi platform.