US banks hit by deposit delays caused by error at payment processing network, Fed says

ByMatt Egan, CNNWire
Sunday, November 5, 2023
US banks hit by deposit delays
Multiple US banks were hit by deposit delays caused by an error at a payment processing network, according to the Federal Reserve.

Multiple US banks were hit by deposit delays on Friday caused by an error at a payment processing network, according to the Federal Reserve.

The Clearing House, which operates the Automated Clearing House system, which allows banks to send electronic payments to each other, experienced a processing error with a batch of bank transactions. Banks send everything from direct deposit paychecks to customer bill payments for mortgages and utility bills through the ACH system.

The Clearing House told CNN on Saturday the issue "impacted less than 1% of the daily ACH volume in the United States" and it was "working with the financial institutions who have customers that have been impacted."

"All other ACH transactions are processing as expected," the company said.

An industry source had told CNN the problem did not appear to be a bank-specific issue.

Greg MacSweeney, a spokesperson for The Clearing House, said Friday the problem was caused by a "manual error" and is not linked to a cybersecurity issue.

"TCH is working with impacted financial institutions on the matter," MacSweeney said in a statement.

There has been no update on when the problem will be resolved.

The Federal Reserve alerted banks Friday afternoon the problem was caused by a "processing issue" at ACH. The Fed had said an "error" in a batch of payments delayed the processing of payments.

Customers at Bank of America, Chase, US Bank, Truist and Wells Fargo reported issues on Friday morning, according to Downdetector. Some frustrated bank customers complained on social media about the deposit delays.

"@BankofAmerica where is my money and will you be covering my bills that are due today?" wrote one user on X, formerly known as Twitter.

In a message to customers, Bank of America said "some deposits may be temporarily delayed due to an issue impacting multiple financial institutions."

"Your accounts remain secure, and your balance will be updated as soon as the deposit is received," the Bank of America message read. "You do not need to take any action."

Banks stressed customer deposits remain safe and the bug was introduced by human error and not a malicious attack. Although the rare deposit delay affected deposits at many banks, it appeared other banking systems were functioning normally.

The ACH is operated by the Federal Reserve Banks and the Electronic Payment Network.

The ACH system processes about 74 million transactions on a daily basis, totaling nearly $155 billion, Fed data shows. In all of 2022, there were nearly $38.7 trillion in ACH transactions.

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