Silicon Valley Bank Depositors Begin Accessing Funds From ‘Bridge Bank’

Customers of Silicon Valley Bank started accessing their funds Monday from a new “bridge bank.”

They encountered on-again, off-again connections with the bank’s portal but were able to get to their deposits eventually, The Wall Street Journal (WSJ) reported Monday (March 13).

One startup executive said it took 10 attempts, but the firm was able to get wires to go through by Monday afternoon, according to the report.

A venture firm executive reported gaining access to its funds only at 7 p.m. ET after having tried “5000X” since Monday morning, the report said.

A startup told the WSJ that it gained access to its funds Monday morning and plans to keep funds there to process this week’s payroll but plans to shift all its funds to another financial institution after that, per the report.

Some of those who were interviewed said that they will not only move their funds out of the bank but also change how they bank. Their strategies include setting up several bank accounts to use in the future, according to the report.

Depositors regained access to their funds Monday after federal regulators transferred all deposits from the failed Silicon Valley Bank to a new “bridge bank” called the National Bank of Santa Clara and said on Sunday that the bank would open and resume “normal banking hours and activities, including online banking.”

Those actions followed the Sunday announcement by officials from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the U.S. Treasury that depositors would have access to their funds beginning Monday.

“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said at the time.

When the regulators’ takeover of the bank was announced Friday (March 10), there had been uncertainty around the status of funds of the uninsured depositors who had accounts with more than the $250,000 covered by the FDIC.

At the time, the FDIC said only that uninsured depositors would receive an advance dividend as well as a receivership certificate for the remaining amount of their uninsured funds.