MEMPHIS, Tenn. — A local liquor store is dealing with the brunt of the largest U.S. financial institution failure since the recession nearly 15 years ago after Silicon Valley Bank failed Friday, March 10.
The collapse is impacting larger ownerships, and the financial strain has trickled to Gaslight Wine & Spirits.
The Federal Deposit Insurance Corporation (FDIC) took control of Silicon Valley Bank on Friday. The agency said regulators will work over the weekend to make sure that insured depositors will get up to $250,000 dollars of their money on Monday, March 13 when the bank reopens.
The owner of Gaslight Wine & Spirits, Anthony Frulla, said they use Patriot Software for their direct deposit, and Silicon Valley Bank processes those deposits causing a direct impact on their employee’s payments actually making it into their accounts.
“We talked to our payroll administrator and she said that the bank [that processes our direct deposits] had unexpectedly closed,” Frulla said.
In other words, none of their employees got paid on Friday, and for the most part, the lack of payment was the first time they were hearing about the Silicon Valley Bank issue.
“I briefly looked at it in the morning, actually coincidentally just after I discovered I didn’t have a paycheck,” Gaslight Wine & Spirits employee Brian Haeberle said. “But I didn’t connect two and two until later on in the afternoon … and so we found out later on that it was indeed [connected].”
The store owner says Silicon Valley Bank processes the stores’ direct deposits through Patriot Software and was told around noon on Friday that the bank closed unexpectedly for the day. Patriot Software CEO Mike Kappel released a statement regarding the issue now impact thousands of it’s customers.
"Silicon Valley Bank is/was in the top 20 banks in the USA. Thousands of Americans and businesses, including Patriot Software and our tens-of-thousands of customers, have been affected by SVB’s actions, and it’s not okay! The officers of SVB and senior players within the FDIC must work together immediately, to ensure that every payroll company that relies on SVB can get their customers’ employees paid without further delay. We are also working quickly with other banks to get our customers back on track, asap."
- CEO of Patriot Software Mike Kappel
The closure has many across the nation sitting with a pre-payday bank balance, but Frulla couldn’t let his employees go empty-handed.
“So, my nephew and I decided that we just needed to go ahead and write checks from the account here and pay the employees for those that might need the money over the weekend,” Frulla said.
With multiple of the employees having families of their own, the only thing some of them could do is let out a sigh of relief.
“Thank you, I think that was the first thing,” Haeberle said. “That was very thoughtful. They didn’t have to do that and so it was one of those ones where I think this shows that the business cares about the people that work for them.
A heartwarming story for some, but not everyone. Store owner Anthony Frulla tells me they’ll continue to write checks for their employees as long as they need to and they trust Patriot Software will work out the issues with SVB soon.