SANTA CLARA, Calif.—Silicon Valley Bank (SVB) customers lined up for hours in front of the bank’s HQ location in Santa Clara on March 13 to access their funds.
Depositors rushed to the bank after the Federal Deposit Insurance Corporation (FDIC) stated in a press release that all assets—both insured and uninsured—would be available for transfer starting on March 13.
According to the press release, the bank was closed by the California Department of Financial Protection and Innovation, which appointed the banking regulator as the receiver. Future dividend payments may be made to uninsured depositors while the FDIC sells off the assets of SVB.
The FDIC also stated: “The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds.”
The FDIC set up a bridge bank and transferred all the insured deposits to the Deposit Insurance National Bank of Santa Clara.
According to the FDIC, each account ownership category could potentially be insured for more than the $250,000 limit.
It added that customers can access their funds through ATMs, debit cards, and writing checks in the same manner as before.
On the morning of March 13, only one or two customers were allowed inside at a time at the Tasman location in Santa Clara. The line barely moved in one hour while SVB staff came out of the bank regularly, chatted with customers in line, and sometimes pulled people in from the back of the line.
Mei Chi, vice president of finance at Platina Systems, said that SVB hadn’t provided much information and had left her to fend for herself.
“Everything we learned was pretty much from periodicals,” she told The Epoch Times.
Platina Systems is a tech startup data center management solution with 15 employees. Chi came in person because she is the signer on the account.
“We like Silicon Valley Bank because they’re innovative and they also create a really good community, a sense of community and entrepreneurial world,” Chi added.
The shuttering of SVB marks the worst failure of an American financial institution since 2008.
On March 10, the FDIC assumed control of SVB to protect its customers from losing their money.
“I choose to trust what the FDIC is telling us,” Chi said. “Fortunately, we have some diversity. So then we were just trying to make sure that everything is in line. So our payroll is not affected.”
On Monday morning, Chi was not able to make any online transactions on the SVB portal. She was able to log in and get to her account, but when she tried to make transactions, it would send her to the homepage and then kick her about, she said.
Then she had to log in again, creating an infinite loop, so she chose to come in person to the branch.
“I think it’s another one of these interesting [phenomena] that I think we’re going to remember for a long time, because everything happened in a matter of a couple of days. So it’s going to be some story to tell in the future,” she said.
Outside First Republic Bank’s Montgomery Street branch in San Francisco, a California business owner named Chad told The Epoch Times that his corporation had an account at SVB and that they were able to withdraw over $1 million from SVB just before all transactions stopped last week before SVB was taken over by the FDIC. Now they have spread the risk by putting money in different banks, including First Republic Bank.
“There’s confidence shaken for sure,” Chad said.
Kaitlyn Ngo, who works in finance for a tech company in the Bay Area, came in person to the SVB branch in the afternoon after trying all morning to do the transactions online.
“It’s exciting, but it’s also a little bit overwhelming. It’s a little crazy. But I heard about the news; I just didn’t know that the line was this long until my coworker showed me the line in the picture,” Ngo told The Epoch Times.
Other people waiting in line said that there are thousands of wires getting queued up in the system, making online transfers almost impossible.
“We’ve got a template set up and everything, but we can’t get to the final step,” an SVB customer told The Epoch Times while waiting in line. “My husband is a serial entrepreneur. We have been banking with SVB for about 30 years.”