The bank collapse has some Florida business owners on edge

JACKSONVILLE, Fla. – California’s Silicon Valley Bank collapsed on Friday forcing the US federal government to step in and guarantee that customers would get their deposits, making it the biggest US bank failure since the global financial crisis. financial crisis of 2008.

The billions invested in the bank include funds from major companies such as Etsy, which is an online marketplace with millions of sellers.

News4JAX spoke to several businesses affected by the bank collapse.

Olga Galushchak, who is a refugee from Ukraine, makes jewelry from beads, crystals and stones, and she has been selling her creations on Etsy for years.

“If Etsy has a serious problem, it’s my problem too because it’s the only platform where I sell my jewelry,” Galushchak said.

Galushchak said so far, his PayPal payments have not been affected.

Another Jacksonville seller who makes custom and printable party decorations said her weekly payment from Etsy was due Monday, but pushed it back until March 20.

A tax compliance software company emailed clients Monday saying the acquisition of Silicon Valley Bank is affecting customer payments and urging customers not to pay invoices until revised. payment details and instructions will be shared.

Joe Krier of Tidel Flow Trading said government intervention on behalf of SVB depositors helped prevent many crises.

“A California bank going down and the most prosperous state in America is definitely the kind of thing that’s going to scare people elsewhere if the Feds don’t do something,” Krier said.

Investor and Jacksonville University finance professor Abdel Missa said that the SVB crisis could actually result in benefits for consumers by lowering interest rates.

According to the Federal Deposit Insurance Corporation, funds for those with SVB deposits should be available on Monday.

An Etsy spokeswoman said less than 1% of its sellers had delayed payments on Friday because of the outage, and they were working to reimburse those sellers.

RELATED: After two historic US bank failures, here’s the next one | The government is racing to assure the US banking system is safe

The collapse affected businesses across Florida

Etsy isn’t the only business affected by the bank’s collapse.

Chefs Choice is a small produce company that delivers fruits and vegetables to a variety of restaurants, bars, assisted living facilities, golf courses and hotels in Sarasota and Bradenton.

Like many affected, Friday was payday for Chef Choice employees, but the company that handles payroll was unable to process direct deposits due to the collapse.

TT Skardoutos owns Chefs Choice and said the collapse has financially affected his employees who rely on their checks to be directly deposited.

“A lot of people are living paycheck to paycheck. They need money.,” Skardoutos said. “They have automatic withdrawals, car insurance, and home payments. Things like that automatically get hit. In the end it shortchanges them and now they owe more money through bounced check fees.

Skardoutos ended up writing checks to his employees. US regulators guaranteed SVB customers would get their deposits by Monday, but as of early Monday afternoon, Skardoutos said nothing had gone through.

“I spoke to our office manager, and he informed me that we have not received anything. The payroll company already took the money from my account earlier in the week, but we haven’t seen it yet,” Skardoutos said.

The collapse of SVB was the biggest since the 2008 financial crisis. After that crisis, Congress passed the Dodd-Frank Act, designed to prevent future bank collapses.

The act requires banks to report certain transactions so that regulators can monitor systemic risks through stress tests. But in 2018, President Trump signed a bill that reduced how often regional banks must submit to stress tests.

As for Chefs Choice employees, they can get used to receiving written checks from the owner until the business moves to another payroll company or stay with the same payroll company as long as that company chooses one. Chefs Choice is a comfortable bank. with.

SVB is a small bank compared to the biggest bank in the country.