US Banks Disrupted: Federal Reserve's Payment System Glitch Halts Customer Deposits
Summary:
Large banks in the United States were unable to process customer deposits following a glitch in an Automated Clearing House system operated by the Federal Reserve. Clients complained about the disruption, prompting reassurances from banks about the security of their accounts. The debacle, which began on November 3, affected many Americans, over 60% of whom live paycheck to paycheck. Despite the restoration of services by the Federal Reserve, complaints continue to emerge about the impact.
Major banking corporations across the United States were hindered from enabling their customers' deposits due to a malfunction in one of the Federal Reserve's payment systems on November 3. The hiccup was attributed to a procedural error within the Automated Clearing House (ACH) - a universally utilized payment processing system by banks for wage depositing to employee accounts. The Federal Reserve Banks and the Electronic Payment Network oversee ACH operations.
Banks reassured customers that their accounts remained protected, and the Federal Reserve confirmed that all services were back up and running at 4:44 pm UTC. Despite this, numerous complaints continue to flow in from customers unsettled by the event. Georgiaree Godfrey, one affected user, voiced her inability to fulfill rent duties as her payment is still pending.
On the flip side, another user, "Des Imoto," opined that funds could not be secure if they were missing, indicating Bitcoin as a possible solution. In the wake of the debacle, "LashishLizard," a distraught user, questioned Wells Fargo about their plans to address any tardy fee costs.
Furthermore, a recent CNBC poll from September reveals that the proportion of Americans living paycheck to paycheck has risen from 58% in March to 61%.
Customer complaints relating to bank outages began escalating around 11am UTC time on Nov. 3. Downdetector reports about Bank of America indicated a peak of 313 complaints within a 15-minute span at 4:00 pm UTC. Chase and Wells Fargo also saw comparable peak complaint numbers of 279 and 137 respectively around the same period.
In response to similar events, the Federal Reserve introduced FedNow in July. This novel system permits banks and payment service providers to carry out payments instantly, removing the need for ACH reliance.
Published At
11/4/2023 2:18:22 AM
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