[jmvoodoo]

We just received this from Rippling:

Hi Rippling Customer,

Yesterday afternoon, Rippling learned that Silicon Valley Bank (SVB) had solvency challenges. We have been working with SVB to ensure timely payments to our customers’ employees. However, this morning we learned that the FDIC had stepped in and taken control of SVB.

We are reaching out to you because you have a payroll that has already been processed for 3/15/2023. Currently, these funds may be sitting with SVB. We are closely monitoring the FDIC takeover and what it means for this pay run. We ask that you please reach out to your bank and request that your bank return any ACH transactions debited from your account by Rippling into SVB under the premise that the transaction(s) are unauthorized, since the bank has ceased operations and is unable to honor the payments.

If the bank agrees to issue a return, you will then need to send a wire to Rippling for the full amount of the 3/15/2023 payroll run by Tuesday 3/14/2023 at 12 PM PST. This help center article has updated wire instructions. Your 3/15/2023 payroll will be marked as Non-sufficient Funds (NSF) on Rippling’s end, but as long as we have received the wire, Rippling will issue employee payments for 3/15/2023 via our new banking partner, JP Morgan Chase & Co.

If the bank does not agree to issue a return, we will follow up with additional instructions. If you have questions, please reach out to our support team.

Thanks, The Rippling Team

[FireBeyond]

> We ask that you please reach out to your bank and request that your bank return any ACH transactions debited from your account by Rippling into SVB under the premise that the transaction(s) are unauthorized, since the bank has ceased operations and is unable to honor the payments.

This seems a little ... odd. To be very clear, I'm not on the bank's side at all... but if the ACH is already debited, then your bank would absolutely be in the right to not return it as unauthorized, because the bank ceased operations _after_ the transaction.

[maxerickson]

Aren't they telling their customers to cancel transfers into SVB?

(seems like the flow of funds is customer bank -> SVB -> [maybe more] -> payroll payees)

Seems likely enough that those transfers will fail to clear in a couple days, not bad to get ahead of that if possible.

[FireBeyond]

Right, but that's my point, not necessarily agreeing with the motivation or such. If the transfer went through before the FDIC shuttered them this AM, it could be argued that the transaction was entirely authorized _at the time_ the ACH debit occurred.

Hopefully banks will sympathize, but I don't know that you can say "the bank was forcibly closed the day after this ACH transaction, so it's unauthorized, because I intended to have those funds flow outbound later".

It would be unauthorized if the ACH debit was _initiated_ after the closure of the bank.

[OJFord]

Regardless of the correctness or legality of the advice, it's a bit odd to wade in and give it at all isn't it? Why not steer well clear? Seem friendly/helpful and buy goodwill I suppose?

[tgsovlerkhgsel]

Rippling has received the money, and it then disappeared while in Rippling's account.

If Rippling can get their customers to somehow get that money out and wire it again, Rippling may not be on the hook for replacing the missing money.

[maxerickson]

It's Rippling's account at SVB. They literally can't steer clear of the transfers.

[jmvoodoo]

Right now, the funds are still showing at least in our online portal. I will be visiting the branch tomorrow and hopefully can prevent the transfer from completing.

Not a fun email to receive either way.

[FireBeyond]

Oh no, I can only imagine, and please don't think for a moment that I'm saying that you shouldn't be able to cancel the transfer. And I hope you can!

Just more that it's odd for Rippling to say that people should report the transaction as unauthorized, because on a strict technical timeline, it wasn't, until the bank was closed, so if it had already debited someone's account before then...

[ozankabak]

We bank with Mercury and I couldn't get a hold of them in business hours after receiving this email at 5:30PM CET on a Friday (unsurprisingly). This email seems odd to me, Mercury shows a transaction posted as of March 9 for employee payments, and another posted as of March 10 for tax payments. Had I was successful in contacting Mercury, would they even be able to reverse them?

Rippling should be working with FDIC to sort out these in-flight payments, not asking their customers this. When I reached their support team for what the additional instructions are, I couldn't get an answer. This situation sure doesn't look great.