Banking System Glitch Delays Direct Deposits, Sparks Concern Among Customers

A recent “human error” deep within the infrastructure of America’s banking system has led to delays in direct deposit paychecks for some customers, causing frustration and concern.

The issue, which emerged with the Automated Clearing House (ACH) payments system last week, is impacting consumers and employers.

Moving Markets

Key Points:

  1. Origin of the Problem: The problem originated with the ACH payments system and has resulted in some payments not going through as intended. Banks have assured customers that all funds are secure, but resending payments can take time.
  2. The extent of Impact: It’s not clear how widespread the issue remains, and some customers have yet to receive their deposits. Banks rely on originating banks to resend payment files, adding to the uncertainty.
  3. Regulatory Oversight: Federal regulators are closely monitoring the situation. The Consumer Financial Protection Bureau (CFPB) is aware of the issue and is watching how financial institutions are responding. The disruption underscores the importance of the nation’s payments infrastructure.
  4. Customer Concerns: Customers have expressed frustration on social media platforms and online forums. Some report being unable to pay their bills on time, while others have faced delays in accessing their paychecks.
  5. Banks’ Responses: Wells Fargo and Bank of America are affected. Wells Fargo has promised to update account balances as originating financial institutions reissue deposits, and they are working directly with affected customers. Bank of America has alerted online customers, reassuring them that their accounts are secure and balances will be updated as deposits are received.
  6. Chase’s Explanation: Chase informed customers about a “system issue” that impacted ACH debits and credits sent to them and other banks. They stated that the originators of these deposits are working to resend payment files for processing.
  7. The Clearing House: The Clearing House, owned by major commercial banks, operates the ACH system. They acknowledged the issue as a “manual error” and noted that it did not involve cybersecurity concerns.
  8. ACH Network’s Scale: The ACH Network processes a substantial volume of transactions in the United States, with 7.8 billion payments totalling $19.7 trillion during the third quarter alone. Therefore, even a small percentage of issues can impact many transactions.
  9. Calls for Transparency: Some customers and financial experts have called for more transparency in addressing such incidents. Dennis Kelleher, CEO of Better Markets, emphasized the importance of full transparency to build trust and confidence among the public.

The situation highlights the critical role that payment systems play in the financial infrastructure and the need for robust systems and transparency when issues arise.


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