On March 10, 2023, the Silicon Valley Bank (SVB) collapsed, becoming the second-largest bank failure in U.S. history. The SVB was a U.S. commercial bank that specialized in technology startup banking, providing finances for around half of the U.S. venture-backed technology and health care companies.
After the collapse, California banking regulators took control of SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Then, the Deposit Insurance National Bank of Santa Clara (DINB) was established by FDIC and all insured SVB deposits were transferred to DINB.
By March 12, 2023, plans were announced by federal regulators ensuring SVB depositors would have full access to all their funds by March 13, 2023. Plans were approved to backstop depositors and financial institutions associated with SVB. The losses due to the collapse of SVB will not fall on taxpayers nor will there be a government bailout. SVB was designated a systemic risk, allowing it to unwind in a way that protects depositors.
Additionally, a new Bank Term Funding Program (BTFP) was created by the Federal Reserve to safeguard institutions affected by the collapse. This will provide loans of up to one year for affected institutions to help meet depositor needs.
In an effort to help individuals better understand the SVB situation, the FDIC released FAQS.
How do I close my account?
You can close your account in any of the four ways below.
- Create an automated payment or a bill pay to another financial institution.
- Direct a wire transfer to another financial institution.
- Write a check for your available balance and deposit the check at another financial institution.
- Visit your local branch and request a “no fee” cashier’s check or money order.
Am I able to continue using banking services, including checks, ATM, and debit cards?
Yes, as of Monday, March 13, 2023, you can use your personal checks for a limited amount of time.
- ATM/debit cards may be used for a limited period of time. You can also make deposits until the DINB closes. However, individuals should act quickly to replace the following services as they are only available for a limited time: automatic payment and bill pay, ATM/debit card, direct deposit, and social security.
For more information, read the full FAQ.
If you have any questions regarding the SVB collapse, please contact your dedicated Creative Benefits, Inc. team member.