A processing glitch in a banking network that processes electronic transfers for major U.S. bank accounts led to delays in settling deposits, some of which remain stalled, according to the private company that operates the system.
The Clearing House Payments Co. (TCH) said in a statement Monday that some payment information that was sent to financial institutions “with the account number and names of customers masked,” which means that those payments weren’t processed right away. It blamed the problem on a technical error that occurred on Nov. 2.
The company is owned by 22 major U.S. banks, including JP Morgan Chase, Bank of America, Wells Fargo, TD Bank, Capitol One, and Citibank, according to its website. The TCH network allows banks to route payments to one another electronically, and banks use it to send direct deposit payments, money transfers, or other services.
It said that the impacted payments were expected to be posted to customer accounts on Nov. 1, Nov. 2, and Nov. 3 were delayed, and “in many cases, they continue to be so.” The firm stressed that the problem impacted a “very small percentage” of the payments it processes daily.
“The delay in posting these ... payments to customers’ accounts was due to a TCH error and was not caused by the financial institutions that originated or received the payments, or the businesses or other accountholders that initiated them,” the statement said, describing the technical problem as “isolated.”
The statement said TCH is now working with the banks, customers, and the Federal Reserve to try and resolve the problem.
“All Federal Reserve financial services are operating normally,” the Fed said in a statement posted to its website. “This error was contained in a single interoperator file that was distributed by EPN [electronic payments network] to its participants during the November 2, 6:00 p.m. processing window. These entries contain valid NACHA syntax, but obscured account information and recipient information,” the central bank also said in a now-removed alert. (The NACHA file format is the protocol for structuring instructions in a way that successfully initiates the payments.)
“Immediate steps have been taken to prevent a reoccurrence,” TCH’s statement said, while saying its network continues to “operate normally, processing tens of millions of electronic payments each day.”
Bank of America told customers in a statement that some of their deposits could be temporarily delayed because of the processing error, it said in a memo last week, while JPMorgan Chase also said it will waive any overdraft fees, it was reported.
“Your accounts remain secure, and your balance will be updated as soon as the deposit is received,” Bank of America said, according to multiple reports.
Wells Fargo, meanwhile, wrote on X last week that “technical teams are aware and working to resolve this issue as quickly as they can.”
PNC Financial Services also sent out a notice over the weekend to customers, which said the firm will waive “any non-sufficient funds or overdraft fees you may incur as a result of this delay.”
As of Tuesday, the website DownDetector showed there were problems for customers at Bank of America, Wells Fargo, U.S. Bank, Chase, and others. Some customers complained about the delays on social media, writing to various banks that they were unable to pay their mortgages, utility bills, or rent.
Writing to Bank of America’s X account, one user stated: “Day 4 & still no direct deposit, no update on potential resolution or at they very least what’s being done to resolve the issue, no transparency, no assistance, no communication from you all at all. Nothing. Wow. This is so bizarre.”
It’s not the first time that major U.S. bank customers have reported problems, including account glitches. In June, for example, numerous Chase customers had posted on social media that their rent or bill payments were taken out of their accounts twice and reported hold times with customer service approaching more than an hour before the bank said it had “resolved the underlying issue” and was in the process of issuing refunds or reversing transactions for customers.
Meanwhile, Wells Fargo customers in August reported that some of their deposits had disappeared. The company blamed it on a “technical issue” at the time, saying that a “limited number” of accounts were impacted.
So far in 2023, at least five regional U.S. banks have failed, including one last week. Citizens Bank, based in Iowa, was closed by the Iowa Division of Banking due to financial instability, allowing the Federal Deposit Insurance Corporation (FDIC) to take control.
The FDIC, in a statement on Nov. 3, said that “the two branches of Citizens Bank will reopen as branches of Iowa Trust & Savings Bank on Monday during normal business hours” after the agency takeover. “Depositors of Citizens Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.”
