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November 03, 2023 at 12:50 PM
What You Need to Know
- A clearinghouse processing snag appeared to affect JPMorgan Chase, Wells Fargo, Bank of America Truist and U.S. Bank.
- Customers reported delayed payroll direct deposits.
- The Clearing House, which operates a giant ACH network, said it was working with affected banks.
Customers at JPMorgan Chase, Wells Fargo, Bank of America, Truist and U.S. Bank, among others, encountered problems Friday and beyond with delayed direct deposits, an issue apparently tied to a processing snag at a multi-bank clearinghouse network.
Outage monitoring site Downdetector indicated various problems at multiple institutions, including issues with account balances, transactions and deposits. The site logged hundreds of reports on various account snags.
While problem reports on Downdetector had subsided significantly by Monday, social media posts there and on X, formerly Twitter, indicated the trouble hadn’t been resolved for everyone.
“The issue is affecting multiple banks and bank customers because a payroll file or files haven’t come through yet,” a JPMorgan Chase spokesman told ThinkAdvisor by email Friday.
A Wells Fargo spokesperson referred a question on the matter to The Clearing House, a company that operates payment networks that clear and settle more than $2 trillion daily.
“The Clearing House (TCH) has experienced a processing issue with a single ACH file. TCH is working with impacted financial institutions on the matter,” a spokesman for The Clearing House told ThinkAdvisor via email around noon Friday.
TCH operates the Electronics Payment Network (EPN), an automated clearinghouse (ACH) network, and the Federal Reserve operates FedACH. These are the two authorized automated clearinghouses in the U.S.; they sort the payments received from banks and direct them to the receiving financial institutions.
The glitch, attributable to “human error,” touched less than 1% of the daily ACH network volume, the TCH spokesperson said in a phone interview later; he didn’t immediately know exactly how many banks and customers it affected.
A U.S. Bank spokesperson told ThinkAdvisor in an email Friday afternoon: “We’re aware of an industry-wide technical issue impacting some deposits for 11/3. Customer accounts (remain) secure, and balances will be updated when deposits are received. We do not have an estimate on timing at this point. Customers do not need to take any action.”
A Fed website carried a notice posted Friday afternoon saying a file distributed by EPN to its participating institutions during a processing window Thursday evening contained an error. EPN informed the Fed that the items can’t be processed by the receiving institutions because account and recipient data are obscured.
“EPN has instructed its participants to initiate returns, and originating depository financial institutions will need to be prepared to initiate new items to complete the payments,” the Fed reported.
Indeed, some customers indicated on social media they were told a clearinghouse used by many banks had experienced an outage overnight.
