Because of the situations with SVB and Signature Bank we thought we would dedicate this Unbound to sharing information with our community. Our normal content will return next week.
FDIC SVB FAQ
by FDIC | FDIC
The following list of responses to frequently asked questions may assist you in understanding what is happening at SILICON VALLEY BANK.
On Friday, March 10, 2023, SILICON VALLEY BANK, SANTA CLARA, CA was closed by the CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION & INNOVATION. The Federal Deposit Insurance Corporation (FDIC) was then appointed Receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). The bank will be open for a LIMITED period of time providing LIMITED services.
Resources for SVB Depositors
by Klaros Group | Klaros Group
Saturday March 11, 2023; 6 PM PST
We at Klaros have received numerous inquiries today from VCs and portfolio companies with concerns about the FDIC’s treatment of accounts on deposit at the receivership formerly known as Silicon Valley Bank. We have considerable experience with receivership situations and the rules of deposit insurance coverage, but it’s been a while since we’ve needed to draw on it.
As a service to our clients and others struggling through this difficult time, we thought it might be helpful to compile some basic information for companies attempting to sort out deposit insurance coverage issues in the aftermath of the SVB failure. These resources should provide a useful starting point for many, but we recognize that they won’t answer every question. Importantly, they do not constitute legal advice. This post is timestamped and we will update it if appropriate.
The FDIC’s press release states that the agency has moved insured SVB balances to a new bank (Deposit Insurance National Bank of Santa Clara). We expect that bank to open for business Monday morning and further expect SVB deposit customers to be able to conduct business operations as normal - but only to the extent of their insured deposit balances, even though those balances may not suffice for many companies’ most pressing operational needs, including mid-month payroll.
Common Questions Regarding Access to Funds After Failure of an FDIC-Insured Bank
by Cooley | Cooley
March 11, 2023
On Friday, March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation (DFPI). The Federal Deposit Insurance Corporation (FDIC) was named Receiver and immediately created the Deposit Insurance National Bank of Santa Clara (DINB) to facilitate the resolution of SVB. Read the FDIC’s official press release announcing the closing of the bank and the DFPI’s press release. The FDIC also has established a resource page.
The bank’s sudden failure means there are many questions about the ability to access accounts and funds held at the bank at the time it closed. Each bank customer experience may be different, and each bank customer should review its applicable account agreements and any available information regarding its balances in relevant accounts. The following is intended to provide a general overview of the treatment of assets in different types of accounts for informational purposes only; it does not constitute legal, business or financial advice. You should contact your lawyer, financial adviser or other professional advisers to advise you on your specific situation before you take any action, rather than relying on this alert.
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Resources to navigate the uncertainty surrounding FDIC: There have been many resources circulating around the industry. We’re highlighting a few relevant ones that may be helpful that have been provided by Venture Forward:
FDIC landing page (including FDIC press release with details on protections for insured depositors and FAQs released this morning)
- Klaros Group: Resources for SVB depositors
Cooley: common questions regarding access to funds after failure of an FDIC-insured bank and video update
WSGR: Addressing legal issues related to the Silicon Valley Bank closure
Lowenstein Sandler: How VC-backed startups may extend payroll and avoid furloughs
Goodwin Procter: FAQ about the Silicon Valley Bank situation in the U.S.
Sidley: Implications of Silicon Valley Bank closure
Disclaimer: None of the content in this newsletter is meant to be financial advice. Please do your own due diligence before taking any action related to content within this article.
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