Why do they hold credit against you when you apply for Fiduciary?

Catmae, my experience was that the VA's scrutiny of fiduciaries increases as the amount of monthly Aid and Attendance Pension increases, e.g. when the VA was giving my dad less than$400/month, the VA allowed me to be his fiduciary without much scrutiny, but when it was increased to nearly $2,000/month, I had to pass an extensive background check and provide records of how every dollar was spent. These requirements were similar to those for guardianship and conservatorship. Although being my dad's SS representative payee was a little less scrutinized, I don't think either the VA's or the conservatorship court's requirements were unreasonable, given the financial shenanigan opportunities that are invited if there isn't close scrutiny.

I don't think you should worry too much about not being your dad's VA fiduciary, given that the VA will appoint someone as his fiduciary (or allow him full control if he his competent for that), so his home health care bills and other bills can be paid. And, on the bright side, you won't have to track the money and provide detailed reports to the VA, as someone else will have to do that.

Kudos to you for taking care of your parents for over 10 years. Best wishes for you and your dad.

P.S. As a side note, neither durable powers of attorney (DPOA) nor court-ordered conservatorships are applicable to either VA or SS benefits, as each of those agencies have their own rules and regulations, completely separate from civil jurisdictions.

You wrote:

"Why should my few old credit bills from surgeries I didn't even know I had..."

I'm confused how you could have had surgeries but not be aware of them?

It sounds as though you need to appeal the decsion that the VA made.

Were these things on your credit report taken care of? If so, you need to call the place that billed you and have them remove them from the report. My sister had $30 dollars that showed up on her report and she claimed she paid it. Cause somekind of problem.

Ask the bank how are Dads bills to get paid.

They hold credit against you because if you can't handle ur own money you may not be able to handle another persons.

https://www.agingcare.com/articles/what-to-do-when-bank-rejects-poa-178641.htm
This is a good article from this site, as well.
A bank SHOULDN'T refuse a properly worded relatively recent POA. It is really illegal to do so. Usually that language is written right into the POA. But they have a right to check and question, and some pension plans, stock stuff does require paperwork to be done. POA doesn't work for the IRS and for Social Security. They DO have their own forms, rules and regulations.

It's not clear to me what is causing your problems. You say you are his VA fiduciary, but do you have a properly executed POA outside of that? I know that some banks are notorious for not accepting legitimate POAs and want their own forms completed, is that what is going on?

WHO stopped you?
Are you keeping meticulous records; that is to say do you have folders, receipts and all you need to prove you are paying for his bills? And are you paying properly signing his name and then "your name" with by POA following it?
You name should not be on his accounts. That is co-mingling money. You should be listed only as "POA" after presenting your POA papers.
You should see an attorney to learn how to do the fiduciary duties of a POA. No one will stop you if your POA papers are correctly done and you are paying your father's bills, keeping records and receipts.
You cannot play fast an loose with POA. That is to say you cannot buy your dad clothing and then take that money from his account just claiming "I got him clothes on my charge card and he owes me this." That is a huge NO NO.
So just become well educated on acting as a POA. This is a legal fiduciary duty and you can be prosecuted for doing it wrong.
I am here to tell you it is not your bills that are stopping you acting as Fiduciary. It is something else. You need to find out what that is. Your bills are your own business and have nothing to do with your father and his monies.