The latest on the Silicon Valley Bank collapse: Live updates

Abraham Smith

10:57 am ET, March 14, 2023

What the FDIC acquisitions of Silicon Valley Bank and Signature mean for their customers and employees

By Jeanne Sahadi of CNN

Federal Deposit Insurance Corp. Headquarters (FDIC) in Washington, DC on Monday, March 13.

(Al Drago/Bloomberg/Getty Images)

That’s how things stand for customers and employees at Silicon Valley Bank and Signature Bank, both of which failed this week and were promptly taken over by the FDIC.

Will customers have full access to all their deposited funds? Yes. The US government intervened over the weekend, assuring that bank depositors will have access to all their money from Monday March 13 and that losses related to the SVB collapse will not be borne by taxpayers.

This means customers can access their insured deposits as well as their uninsured deposits from the “bridging bank” that the FDIC created for SVB deposits and for Signature deposits.

Both SVB and Signature were FDIC insured. That means the FDIC will insure up to $250,000 per depositor for each category of account holder. Some customers may be insured for more than $250,000 if they had more than one type of deposit account since each account is insured separately. If more than one person jointly owns an account, each owner is covered up to $250,000.

But the move by the three agencies to also give clients access to their uninsured deposits was crucial. For example, most SVB customers are corporations, and they have well over $250,000 in deposits because they have used SVB for much of their cash management, including payroll.

How can customers access their money? Customers can access their money by ATM, debit card, and check — just like before, the FDIC said.
What about lines of credit? Per the FAQs on the SVB and Signature closures, customer lines of credit have been transferred to the new bridge banks that the FDIC has created to handle customers’ transferred deposits and banking services. The agency advises that customers should contact the bank with questions about their credit lines.

Can customers continue to leave their money where it is? Yes, but the FDIC will tell customers how much longer they can do this. To date, the FDIC has not set service end dates for SVB or Signature customers.

What if a customer has a loan through SVB or Signature? Customers with a loan must continue to make payments to the same payment address even if the FDIC ultimately sells the loan. Any changes will be communicated.

Will SVB and Signature staff keep their jobs? Very likely, but maybe not for long. Typically, in an FDIC takeover, the failed bank’s employees are retained to help with the transition. Your salary and benefits will be paid by the FDIC during this time. Should the FDIC find a buyer for one of the banks, the acquiring entity will decide whether the banks’ employees will remain.

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