On Friday, March 10th, Silicon Valley Bank (SVB) was closed and the Federal Deposit Insurance Corporation (FDIC) was named as receiver. In Massachusetts, SVB is the acquiring institution of the former Boston Private Bank. With the action on Friday all Massachusetts offices of SVB were closed and ownership transferred to the FDIC. The FDIC has indicated that all branch locations will open for business on Monday, March 13th. The FDIC has also said that all customers with less than $250,000 will have access to their funds on Monday. Please see the FDIC release here: .
For lawyers and law firms with IOLTA accounts at SVB it is important to know that for FDIC insurance purposes IOLTA accounts are treated as Fiduciary accounts and qualify for pass through coverage to the underlying owner. This means, generally, that each client with funds in an IOLTA account is insured up to the FDIC maximum of $250,000 (subject to other funds the client may have at the institution, and satisfactory documentation to demonstrate ownership, etc.).
It is unclear what process the FDIC will go through to determine insurable amounts on IOLTA accounts that exceed $250,000.Customers with accounts in excess of $250,000 are advised to contact the FDIC at 1-866-799-0959 to receive specific instructions.
During the week of March 13th, it is expected additional information for SVB depositors will be released and we will post that information as it becomes available. Lawyers and law firms affected by the SVB closure with any questions may contact the IOLTA Committee at 617-723-9093.
During the week of March 13th, it is expected additional information for SVB depositors will be released and we will post that information as it becomes available. Lawyers and law firms affected by the SVB closure with any questions may contact the IOLTA Committee at 617-723-9093.