Customers at major banks experienced direct deposit delays on Friday due to an industry-wide processing problem.
The Federal Reserve identified an issue with the Electronic Payments Network.
The problem arose from a manual error associated with an ACH file.
Customers at prominent banks faced a frustrating hurdle on Friday as direct deposit delays rippled through the industry. Institutions including Bank of America, Chase, Truist, U.S. Bank, and Wells Fargo reported outages, leaving customers puzzled about their financial transactions.
While the exact nature of the complaints remains unspecified, the Federal Reserve was quick to assure the public that all Federal Reserve Financial Services are currently operating without disruption.
Let's explore why the delay occurred and what individuals can do to combat scares like these in the future.
When money that we expect to be there on a Friday morning isn’t there and your autopay is set up to pay a credit card or a buy now pay later loan, it can cause some real issues
The Culprit: ACH Processing Glitch
The Federal Reserve attributed the delays to a processing issue within the Electronic Payments Network (EPN), a vital element of the Automated Clearing House (ACH) network. Gregory MacSweeney, VP and Head of Communications at The Clearing House, the entity overseeing EPN, clarified that the problem was a result of a manual error associated with an ACH file.
Banks are diligently working to rectify the errors in the affected payments. Lee Henderson, VP of Public Affairs and Communications at U.S. Bank, provided assurance, stating, "Customer accounts remain secure, and balances will be updated when deposits are received." He further assured customers that no immediate action is required on their part.
Implications for Customers
For individuals facing deposit delays, Matt Schulz, Chief Credit Analyst at LendingTree, offers a solution. “When money that we expect to be there on a Friday morning isn’t there and your autopay is set up to pay a credit card or a buy now pay later loan, it can cause some real issues,” he said.
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Affected customers can contact their lenders and explain the late payments, citing the industry-wide issue as the cause. This proactive step can help avoid potential penalties or complications resulting from delayed payments.
Consider Your Options
Incidents like these underscore the importance of considering the online bank you're working with, and what they can offer you in terms of security and high-yield savings accounts. While they may require locking your money for longer periods, they offer the advantage of generating higher interest rates compared to regular liquid checking or savings accounts.
This can be particularly beneficial in situations where unexpected delays occur, providing a cushion against financial disruptions.
The Bottom Line
While industry-wide processing issues can cause inconvenience, it is important to be informed and stay proactive. These measures can help individuals navigate such situations with minimal impact on their financial well-being. Exploring options like high-yield savings accounts can offer added security and benefits in the long run.