The recent Silicon Valley Bank events have created a whirlwind of questions and concerns for businesses of all sizes. Our team at Bluevine is hard at work to ensure that our customers can continue banking with confidence, knowing that their money is safe and FDIC insured with Coastal Community Bank, Member FDIC.
Keep reading for more information about what happened to Silicon Valley Bank, and the limited impact it has had on Bluevine customers.
What happened with Silicon Valley Bank?
On Friday, March 10, 2023, Silicon Valley Bank (SVB) was placed into receivership with the Federal Deposit Insurance Corporation (FDIC). This was the result of a growing demand for customer withdrawals that exceeded SVB’s ability to fulfill those withdrawals.
United States regulators announced on Sunday, March 12 that depositors would be fully covered for balances above the FDIC insurance threshold of $250,000.
What is a bank run?
A bank run happens when a high volume of bank customers withdraw their funds from a financial institution at the same time, typically out of fear that the bank may fail.
In SVB’s case, this fear was fueled by the bank’s latest earnings announcement on March 8, 2023, which showed that SVB needed a significant amount of funding to meet the increasing demand for withdrawals. The bank had also been suffering from a decline in customer deposits, losses on investments, and a downtick in venture capital funding.
How does the SVB news impact Bluevine customers?
The security of customer deposits is our number one priority. Bluevine Business Checking customers can rest assured that their deposits are held by Coastal Community Bank, a member of FDIC, ensuring FDIC insurance protection up to $250,000 per depositor, regardless of the recent events at Silicon Valley Bank.
However, some bill pay methods integrated with Bluevine did use SVB as a payment intermediary. Because of this, several payment methods were temporarily unavailable, including payments by credit card, external account, check, and RPPS. We proactively paused these features to help protect Bluevine customers from exposure to SVB’s closure.
These payment methods are now up and running, and Bluevine customers should have full use of all their usual bill pay options.
Can former SVB customers open a Bluevine account?
Yes––we welcome small businesses from a wide range of industries to apply for Bluevine Business Checking online.
What happens to SVB now?
Officials first set up a full-service bridge bank, Silicon Valley Bridge Bank, N.A., which was operated by the FDIC. As of March 27, 2023, Silicon Valley Bank was purchased and is now a division of First-Citizens Bank & Trust Company.