SVB Bank Updates

Most Recent Updates FAQs Press Releases

Thank you for being so patient as Patriot works to resolve all SVB-related issues. We apologize for the inconvenience and stress this has caused.

As of 4/4/23

We have completed setting up accounts with JP Morgan Chase, Fifth Third, and First Citizens Bank (which acquired SVB). We are now currently midway through infrastructural upgrades to support our new multi-bank architecture, along with many operational enhancements to support funds flowing across multiple institutions. The bank utilized for particular transactions will be subject to Patriot’s discretion.

The work being done behind the scenes with the banks to get everything operational will take time.   Transactions through each bank must be tested within the NACHA network and verified to ensure every transaction is 100% accurate.

As soon as we have finalized the setup process, we will announce an update.  For customers who have a debit block with their bank, we will make the new ACH IDs available.

We appreciate your patience as we complete these upgrades.

As of 3/28/23

Requests for NSF fees or overdrawn banking fees can be submitted through April 7, 2023. Please see our help article for more information on “Submitting Reimbursements for NSF or Overdraft Fees.”

As of 3/17/23 at 1:15 p.m.

As a result of the SVB closure, Patriot will review and consider reimbursement for any bank fees due to overdrafts or non-sufficient funds as a result of employees or contractors not being paid when expected

We have released a new page for employees to submit any bank fees they have incurred in their Patriot employee portal. We expect to also release a page for employers/administrators in your Patriot account next week so you can submit requests on an employee’s or contractor’s behalf.

For details, see our help article Submitting Reimbursements for NSF or Overdraft Fees.

We want to make this right for your affected employees and contractors. If you have any questions, please reach out to our Customer Care Team.  

As of 3/16/23 at 12:27 p.m. ET

We’ve added a way for employees to self-report overdrafts or NSF fees in their employee portal. Please read our help article for more information.

As of 3/16/23 at 10:41 a.m. ET

Please take a moment to read the following update from our President and Chief Legal Officer.

FDIC Control of SVB: With full Federal backing, the money moving through the new SVB bank that controls the former SVB’s accounts is entirely protected during this transition. SVB’s systems went back online, so every payroll dollar is completely protected in FBO (For-Benefit-Of) accounts as these funds will be 100% processed through and guaranteed by the FDIC. In his press release, the CEO of the new SVB Bridge Bank, Tim Mayopoulos, said:

“This action by FDIC effectively means that deposits held with SVB are among the safest of any bank or institution in the country.”  

To reiterate, because of the full FDIC guarantee of every dollar at SVB, we feel confident in processing payroll until our new major banking partners are fully vetted to ensure zero disruption of service.  

Future Plans: Payroll will be moved from those SVB accounts once test payrolls have been run through alternative banking partners.

We do anticipate that tomorrow’s payroll (Friday, 3/17) if run with direct deposit, will go through with zero issues. Until new accounts are fully tested and integrated, Patriot plans process payroll through the Fed next week, as well. This will change once the new accounts are fully set up and protected.

All client funds are held in custodial accounts attached to SVB’s EIN, meaning they are in protected accounts similar to what would commonly be known as an escrow account. Those FBO accounts have greater protection for every unique client, and there is no access to funds within those accounts by employees either at SVB or at Patriot.

We at Patriot understand that a tremendous amount of news is going around regarding the SVB collapse. We are doing everything in our power to communicate to all Patriot customers with the most updated information we have available. We appreciate your understanding, as our teams are diligently committed to resolving this SVB situation.

As of 3/15/23 at 12:14 p.m. ET

Please take a moment to read an open letter from our CEO to our customers.

Here are some scenarios you may need to address from the past few days:

1. If you didn’t void the payroll and paid the employee full net pay by paper check, then the employee received the direct deposit; see “ Scenario 1” to record an advance.
2. If you didn’t void the payroll and paid the employee a partial payment, and the employee received the direct deposit; see “Scenario 2” to record an advance.
3. If you voided payroll and gave the full net amount of the check for the amount, see “Scenario 3” to rerun the payroll.
4. Payroll taxes are addressed in this section.

Scenario 1:

If you paid the employee by check for the entire net pay and direct deposit went through and you did NOT rerun payroll:

The easiest way to resolve this is to ask your employee to return the extra pay directly to you. If the employee is not able to repay the employer directly, use the following steps to record an advance and deduct the advance from their next paycheck.

1. You will need to run a special payroll to record that the advance payment was made by check.  

2. Be sure to turn off the direct deposit for this payroll by changing the toggle under Direct Deposit from “Enabled” to Disabled. This is just for recording purposes so your year-to-date totals are accurate.

3. If you haven’t already, create a new non-taxable money type called “Advance” or something similar.

4. Use the Advance money type to record the net pay amount you paid the employee.

5. Proceed and approve this special payroll.

6. You will then need to set up a post-tax deduction to treat the paper check payment as an advance.  

7. Add a post-tax Company Level Deduction called “Advance Repay” or something similar.

8. Add the deduction to the employee’s record for the amount of the check. If you want to divide the payments over a period of time, you can enter a smaller dollar amount and add a lifetime limit so the deduction stops after the full check amount has been deducted. In the employee’s next regular payroll, the money will be deducted.  

9. Be sure to inactive the repayment deduction from the employee’s record after the payroll is run.

Scenario 2:

Unvoided payroll- partial overpayment: If you paid the employee a portion of their payroll until their direct deposit was paid

The easiest way to resolve this is to ask your employee to return the extra pay directly to you.  If the employee cannot repay the employer directly, use the following steps to record an advance and deduct the advance from their next paycheck.

1. You will need to run a special payroll to record that the advance payment was made by check.  

2. Be sure to turn off a direct deposit for this payroll and change the toggle under Direct Deposit from “Enabled” to Disabled. This is just for recording purposes so your year-to-date totals are accurate.

3. If you haven’t already, create a new non-taxable money type called “Advance” or something similar.

4. Use the Advance money type to record the net pay amount you paid the employee.

5. Proceed and approve this special payroll.

6. You will then need to set up a post-tax deduction to treat the paper check payment as an advance.  

7. Add a post-tax Company Level Deduction called “Advance Repay” or something similar.

8. Add the deduction to the employee’s record for the amount of the check. If you want to divide the payments over a period of time, you can enter a smaller dollar amount and add a lifetime limit so the deduction stops after the full check amount has been deducted. 

In the employee’s next regular payroll, this repayment deduction will happen.  

9. Be sure to inactive the repayment deduction from the employee’s record after the payroll is run.

Scenario 3:

Voided Payrolls and paid by paper check and need to record payroll: If you have voided the original direct deposit payroll and paid the entire net pay with paper checks.

1. You will need to re-run your payroll using the actual date that you paid your employees. Please contact our Support team if you see a warning preventing you from entering the dates you need.

What about Tax Collections?

Tax collections will depend on whether you are a monthly tax depositor or a semi-weekly tax depositor. You can confirm your depositor status under Settings > Tax Service Settings > Tax Deposit Frequencies.

If you are a monthly depositor, you should have received a tax refund from the original payroll you voided. Tax collections for the new payroll should be on a normal schedule.

If you are a semi-weekly depositor, we may have already collected and paid your taxes. Please call our Support team to arrange to stop your tax collections.

Should you get a tax notice because of this SVB issue, please upload your tax notice to your software account by going to Settings > Account Settings > View/upload files to support. Patriot will cover any penalties and interest due to late payments due to this SVB issue.

As of 3/14/23 at 3:30 p.m. ET

SVB systems are up and running as of Tuesday, March 14, 2023, and we have successfully sent payroll direct deposit for all 3/10/2023, 3/13/2023, and 3/14/2023 payrolls. If Patriot has collected money for direct deposit for pay dates 3/15/2023 or 3/16/2023 and the payrolls have not been voided, you can expect the payments to employee bank accounts to function normally. 

We have once again enabled direct deposit in our software. You will be able to process your payrolls as normal, but please take into consideration your normal direct deposit timing. You can use printed paychecks or send a bank wire for anything outside your ACH timing. Should you choose to send a bank wire, please be aware of the 2:00 p.m. ET deadline to run payroll for bank wires. All bank wires must be received by 3:00 p.m. ET the banking day before your pay date.  We have been informed by SVB that due to sheer volume, wire payments may be delayed, so we recommend you run payroll ASAP.  The $15 fee for the bank wire normally charged by Patriot will be refunded. 

Payroll Tax Collections

If you are a Full Service Payroll customer, tax collections will resume Tuesday, March 14, 2023. Any payrolls you have run since Friday where taxes have not yet been collected will be withdrawn from your account soon. You will receive an email with specifics on tax amounts and collection dates.

When Can I Expect To See A Refund For My Voided Payrolls?

If you have voided a payroll on Friday, March 10, 2023, through Tuesday, March 14, 2023, you should see your refund in your bank account on Wednesday, March 15. 

How Long Will You Continue with SVB?

We continue to migrate to three large, well-established banks to keep our bank systems redundant in the event something happens in the future. We will continue to use SVB, fully guaranteed by the FDIC, until we can make a transition to the new banks in an effort to avoid another disruption of service. More information on this is coming soon.

Overdraft Bank Fee Reimbursement

Patriot will cover any overdraft fees incurred by employees or contractors from March 10th through March 13th due to the SVB shutdown. Please have employees or contractors keep documentation, such as screenshots of bank receipts of these fees. We will share further details soon with reimbursement request instructions.

Phishing Scams

Beware of phishing scams. Unfortunately, nefarious schemes are hitting those already hurt by the SVB shutdown. The FDIC or SVB will never contact you to update your banking information. Practice due diligence and never click links in emails from senders you do not know. 

I have paid my employee twice (by paper check and direct deposit). How do I fix this?

• You will need to set up a post-tax deduction to treat the paper check payment as an advance.  
• Add a post-tax Company Level Deduction called “Advance Repay” or something similar.
• Add the deduction to the employee’s record for the check amount.  If you want to divide the payments over a period of time, you can enter a smaller dollar amount and add a lifetime limit so the deduction stops after the full check amount has been deducted. 

Thank you for your understanding and patience as we work to resolve all payment issues.  

As of 3/14/23 at 10:59 a.m. ET

SVB direct deposit systems are now functional and fully FDIC-insured. Patriot Software has begun to process direct deposits today, Tuesday morning, March 14. This applies to all payrolls in which we have collected funds for pay dates 3/10/23, 3/13/23, and 3/14/23 and HAVE NOT been voided.

Employees and contractors should begin seeing payments posted to their accounts by the end of the day Tuesday, 3/14/23. Some banks may not make the funds visible in accounts until Wednesday. 

Refunds for any payrolls you have voided since Friday are scheduled to be refunded to your account on Wednesday, 3/15.

Although direct deposit remains disabled this morning, Tuesday, 3/14/23, we hope to enable it soon.

If you are a Full Service payroll customer, Patriot will schedule a collection for any outstanding payroll tax collection. We anticipate making timely tax payments to government agencies by the March 15 deadline. However, should you receive a tax notice due to the SVB closure, please upload the notice to your account. Patriot Software will cover any delinquent tax penalties because of the SVB closure.

As a reminder, Patriot Software will reimburse employees or contractors who have incurred NSF or overdraft fees. We are currently working on a solution for reporting the fees and will share details with you soon. 

Helpful reminder: Please be aware of scams and phishing emails. The SVB and the FDIC will never contact you via email regarding this matter. Never give out personal information or banking information, and avoid clicking links in any emails from unknown contacts.

Again, thank you for your patience as Patriot works to resolve all SVB-related issues. We apologize for the inconvenience and stress this has caused. 

As of 3/13/2023 at 3:00 p.m. ET

Paydates 3/10/23, 3/13/23 & 3/14/23
We continue to work with 2 large, well-established banking entities to replace SVB and expect to be up and running soon. We have access to the new accounts we need and are in the process of setting up operational integrations to move payroll and tax dollars.

In the meantime, we are operating under the assumption, based on the information given to us from SVB, that the files for the 3/10 and 3/13 payrolls that we have sent to SVB will be deleted, and Patriot will need to recreate and resend them.

• Although technically, the funds are available, SVB’s systems to process direct deposit payments are not yet functional at this time.
• We do not know when SVB’s systems to send files will be functional.
• If they are functional by tonight or early tomorrow morning, we will send the direct deposit for your payrolls dated 3/10, 3/13, or 3/14, and employees could be paid as soon as the end-of-business day tomorrow. Otherwise, employees should be paid on Wednesday, assuming SVB’s systems are up and running.
• If you do not want to wait for the direct deposit on Wednesday, you can void the payroll and rerun it for a new pay date. It is important that you do not backdate a payroll if the employees truly were not paid. The employee paydate determines government tax liabilities.
• If employees were paid by check on the original paydate, void the payroll with the direct deposit. Then, rerun the payroll with the date you actually paid the employees. You may need to contact our Support team to allow for a post-dated payroll run. A message will appear if contacting support is necessary.

Thank you for your patience and understanding. As you can see, there are still many unknowns as we attempt to keep you posted with the most recent developments.

As of 3/13/2023 at 12:15 p.m. ET

Paydates for 3/10/23 and 3/13/23

We have the assurance that all direct deposit funds will be covered.  However, the timing of payments is still to be determined. Deposit files scheduled to be processed on Friday, March 10th or Monday, March 13th will most likely not be processed today.

You have two options for these payroll files:

• Option 1:  Proceed with paying the payroll files scheduled for 3/10.  Payment to employee bank accounts could be made as early as Tuesday, March 14th, but as of this writing, we cannot determine an exact payment date.  There is nothing further you need to do. We will keep you informed as soon as we have an expected payment date.

• Option 2:  Void the 3/10/23 or 3/13/23 payroll in Patriot, and re-run the payroll with the paper paycheck option or handwrite your checks. We will refund you what we collected for employee direct deposits and any tax collections. Refunds could be made as early as Tuesday, March 14th, but we cannot determine an exact date as of this writing. If you are a full service payroll customer, we will collect for payroll tax liabilities at a later date. Voiding payroll will ensure direct deposit payments are not processed.

More Answers to Questions we have received:

When did you find out about the SVB closure?

• We found out about the SVB closure when the FDIC posted their announcement and passed that along as soon as we could clarify any type of information of what that meant for our customers.  We were immediately in touch with our outside legal team and individual bank account managers from SVB throughout the entire process.  Once the FDIC took over the bank, all teams worked aggressively to communicate to the FDIC, Federal Legislators, US Congress, and others—including our CEO’s Open Letter—on behalf of all Patriot clients which resulted in communication with leaders nationally, including Sherrod Brown Chairman of Senate Banking who left a voice mail for CEO Mike Kappel.

Why didn’t you give us any more information earlier?

• As soon as information was confirmed and available we passed it along. On Friday morning, our representative from SVB told us there was a delay in processing, which we passed along. We also continually tried to reach the FDIC for clarifying information and could not get through.

Why did Patriot use SVB when they were not FDIC insured?

• SVB was FDIC insured just like every major bank in the US. The FDIC $250,000 insurance limit applies to individual depositors (see next 2 questions below).

What kind of account did Patriot create for customers?

• When we set up our accounts, each unique customer account deposits were segregated via a special account designation that should allow for each customer’s funds to be individually insured up to the FDIC limit. This means all monies collected for direct deposits and tax liabilities never passed through Patriot’s operating account. Moving forward the same type of special accounts will be set up to keep your direct deposit and tax liabilities separate and covered under the FDIC.

Was SVB using the direct deposit fund or tax-collected funds for investments?

• No one should have had access to these funds. All Patriot customer funds were held in individually separate accounts For The Benefit Of (FBO) for each unique client. Each client’s payroll processed at SVB was individually FDIC protected and funds are not intermingled with any other client. These accounts are completely segregated and inaccessible to Patriot or Silicon Valley Bank employees. The FBO accounts were created to serve as a clearing house for each payroll client to ensure client funds are fully settled prior to payroll being released to employees, eliminating risk for any fraudulent activity by a bad actor. 

Will you cover NSF fees or overdraft fees?

• If your employee or contractor has (Non-Sufficient Funds) NSF for overdraft fees due to the SVB closure, Patriot will cover any NSF fees due to the SVB closure. Patriot will then work with the FDIC for the final reimbursement of any NSF charges. Still, we will immediately handle 100% of those fees to eliminate additional steps for anyone impacted by the SVB crisis. Please hold on to documentation (screenshots, statements etc.) that documents the NSF fee. We will provide a solution to submit these to us in the near future.

Will you cover any late fees and penalties from late tax filings?

• If late fees are associated with the SVB closing, please upload the tax notice to your account. We will write an abatement letter and address the reasons. Should the abatement letter not resolve this situation, we will cover penalties and interest if they are directly associated with the SVB closure.

Going forward, will you have a backup plan?

• Yes. We are currently in the process of setting up redundant banking partners in the event that there is any type of interruption of normal banking operations.

As of 3/12/23 at 7:33 p.m. ET:

Great news! 

We have huge and happy news for all Patriot Software customers—all funds associated with Silicon Valley Bank (SVB), including all payroll dollars in process for Patriot Software clients, will begin being released as of Monday, March 13th.

This news comes from a joint statement from the United States Treasury, Federal Reserve, and FDIC that announced that all depositors will be fully protected. After receiving a recommendation from the boards of the FDIC and the Federal Reserve and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

What this SVB announcement means for you

The above announcement confirms that the direct deposit payroll dollars and payroll tax dollars will be released and guaranteed 100%—even above the standard FDIC $250,000 limit.

Thank you for your patience

We have confirmation from multiple SVB representatives that all payroll funds that were set to be paid on Friday, March 10, 2023, are safe and that Patriot will have access to them. However, we do not yet know whether the SVB system will continue processing existing payments or if new payrolls will need to be run. Either way—Patriot will do everything in its power to be with you every step of the way. 

While there are still a lot of questions that remain unanswered, we will continue to keep you informed as we receive updates. We appreciate your patience during this unprecedented time. 

The Patriot Team

As of 3/12/23 10:45 am ET:

• Please read this letter from CEO Mike Kappel to our customers.
• Please read this letter from CEO Mike Kappel to our government.
• Read Patriot’s response to SVB here.

As of 3/10/23 1:30 pm ET:

Direct deposit update:

Our bank contact shared that our bank, Silicon Valley Bank (SVB), in Santa Clara, California, was closed today. 

Here’s what we know about this unprecedented event:

• According to this statement, SVB will reopen Monday. 
• Direct deposit funds were collected and files were created for processing through SVB.
• We await further communication with SVB and will update you as that comes in.

Can I cancel today’s direct deposit?

At this point, it is too late to stop direct deposit. The funds have been collected and are being controlled by the FDIC from what we know.

Should I cut checks?

• At this point, it will be up to you. If you are financially able, the quickest way for your employee to be paid is via paper checks. However, there is a chance the employee could still be paid through direct deposit, and Patriot cannot help you recoup any funds that are deposited in the employee’s bank account.

Will the funds ever be deposited into employee bank accounts?

• From what we understand, the employee funds for the 3/10 paydate will not be deposited today. At this point, we cannot verify that the March 10 payroll will be deposited into employee bank accounts.

Is the money insured?

• From what we know, each Patriot customer will be FDIC insured up to the amount of $250,000.

Is Patriot holding my money?

• No. From what we understand, the FDIC is currently in control of the funds.

Can I still run payroll for future dates? 

• Yes,  you can still run payroll and print or handwrite checks. We will be disabling direct deposit for future pay dates until this situation has been resolved.

I have a future payroll with direct deposit, will it go through?

• We recommend any direct deposit scheduled for the immediate future be voided and reprocessed to be printed or handwritten checks. 

What is Patriot doing about this?

• We are proactively working with other banks to ensure that our customers can continue with their direct deposit as normal. More details will be shared as we have them. 

How do I get updates?

• We will keep this page updated for you as we learn more.

Related Press Releases

• Patriot’s CEO Apologizes
• CEO Letter to Customers | SVB Closure Doesn’t Stop Patriot Software
• An Update from Our CEO
• An Open Letter to Our Government
• SVB Closure Is Unacceptable