Massachusetts

How the Silicon Valley Bank Collapse Is Affecting Customers in Mass.

The second-largest bank failure in U.S. history is being felt nationwide, including in Massachusetts

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Silicon Valley Bank customers lined up Monday outside of the branch in Wellesley, Massachusetts, to move their money after the collapse of the financial institution.

"All I can think of is that scene from 'It's a Wonderful Life,' it's kind of what I feel like I am part of right now," said Chris Duvall. "It just sort of reminds you that there is a whole big operation, the financial world out there, and I'm just one person and we all have to hope it works right and gets taken care of."

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"Our account was frozen Friday and it got shut off, no access," said Dave Berry, who banked with SVB for business purposes. "We've been successful 25 years plus, and we don't want to fail because of this. Had nothing to do with us, we weren't making bad investments, just our bank."

"One of the big issues was they had a lot of deposits from tech companies," explained Michael Goldstein, finance professor at Babson College. "If a bank has too much concentration of one industry, and the industry goes through a difficult time, that's going to be tough on the bank and all of the depositors, and so even for small companies, it's probably a good idea to have multiple banks service you so if one bank gets in trouble, you have another choice."

A representative of the FDIC was on hand answering questions of customers standing in line.

"This could have been really catastrophic not only for the general economy right but certainly for smaller organizations, small businesses, nonprofits like mine, and for families," said Vanessa Calderon Rosado, CEO of Inquilinos Boricuas en Accion. "It has a ripple effect, it has ramifications, so I'm really happy that the federal government stepped in."

"The wonderful news is that the regulatory structure and the banking industry is there to reassure and it worked again this time, because the fact is that we opened this morning and Silicon Valley Bank clients had access to all of their funds or they will have access to all of their funds as they work through this process," said Kathleen Murphy, president and CEO of the Massachusetts Bankers Association.

She recommends customers review the FDIC's FAQ page for guidance on how to transition services from SVB to another financial institution.

The Federal Deposit Insurance Corporation, the agency responsible for ensuring the stability of the banking system, has its roots in the Great Depression.

"The closure of Silicon Valley Bank has had a big impact on the affordable housing world. Silicon Valley Bank has really been an important partner in the production of affordable housing," said Rachel Heller, CEO of Citizens’ Housing And Planning Association. "With the closure on Friday, it certainly raised a lot of questions and concerns for developers who are about to close on a new deal and get some new affordable homes and also for those that are in construction."

"Now what we need to keep our eyes on is the ongoing production of affordable housing as well as what to share with homeowners or those that were, you know, about to purchase a home with a loan through SVB," she added. "And also with regards to production of affordable housing. It's the developments that were already under construction, but also where developers are getting ready to close on a new affordable housing development. So these are the areas where we really need to keep our eyes on over the next few days."

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