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GN 02402.100: Financial Institution (FI) Closings

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  • Effective Dates: 07/27/2012 - Present
  • Effective Dates: 08/03/2018 - Present
  • TN 11 (09-98)
  • TN 109 (08-18)
  • GN 02402.100 Financial Institution Closings
  • GN 02402.100 Financial Institution (FI) Closings
  • A. Introduction
  • The closing of an FI can have a significant impact on beneficiaries receiving their benefits by direct deposit. FI closings can involve any of these situations:
  • The closing of a FI can have a significant impact on beneficiaries, recipients or representative payees receiving their benefits by direct deposit. FI closings can involve any of these situations:
  • * One FI takes over another,
  • * The closing involves several FIs,
  • * The closing involves only a single, small FI,
  • * Another FI is appointed to receive and distribute the closed FI's direct deposit payments,
  • * The closing involves only a temporary “bank holiday”.
  • It is important to determine which condition(s) apply before developing for new direct deposit payment addresses.
  • B. Procedure
  • A. Actions required when a FI closes
  • 1. Immediate Actions
  • 1. Immediate actions required by the field offices (FO), regional offices (RO) and the Office of Financial Policy and Operations (OFPO)
  • a. FO Parallel to the FI's Main Office:
  • a. FO parallel to the FI's main office:
  • * Contact the Payment Delivery Alert System (PDAS) Regional Coordinator in the RO as soon as there is a public announcement of an FI closing.
  • * Determine if payment address development is needed.
  • * Determine if we need to develop the payment address.
  • NOTE: Some special situations in GN 02402.100B.2. do not require this development.
  • * Begin payment address development immediately, if applicable. Use beneficiary/recipient lists obtained through the RO to contact affected individuals unless the FI uses its own list to contact them. If a beneficiary has a representative payee, contact the payee.
  • * Use available media sources to ask direct depositors to contact the FO /TSC with changes of payment address. Inform them that this can usually be handled by phone.
  • * Collect any completed SF 1199As from local FIs.
  • NOTE: Some special situations in GN 02402.100A.2. in this section do not require this development.
  • * When applicable, begin payment address development immediately. Use beneficiary, recipient or representative payee lists obtained through the RO to contact affected individuals unless the FI uses its own list to contact them.
  • * Use available media sources to ask direct depositors (i.e. beneficiaries, recipients or representative payees) to contact the FO or TSC with changes of payment address. Inform the depositors that they can make this change by phone or online with a mySSA account.
  • * Input all direct deposit changes immediately.
  • REMINDER: If the beneficiary lives outside the local FO service area, develop through the servicing FO.
  • b. RO Coordinator:
  • * Immediately inform the Payment and Recovery Policy Staff in the Office of Financial Policy and Operations (OFPO) in Central Office.
  • * Contact appropriate State officials (e.g., State Banking Commissioner) regarding any special State conditions that may be in effect. Report this information to OFPO.
  • * Designate someone to keep the TSC informed.
  • NOTE: TSC calls may need to be rerouted to allow local TSCs to answer calls from the area affected by the FI closing.
  • * Assist the FO in using lists of affected beneficiaries/recipients (see GN 02402.100B.1.c.) to contact the individuals for new payment addresses.
  • b. RO Coordinator
  • * Immediately inform the Payment and Recovery Policy Staff in OFPO via the designated ^OPRP Reporting mailbox at Central Office.
  • * Contact appropriate State officials (e.g., State Banking Commissioner) to determine any special State conditions that may be in effect. Report this information to OFPO.
  • * Keep the TSC informed.
  • * Assist the FO in using lists of affected beneficiaries, recipients or representative payees to contact the individuals for new payment addresses. See GN 02402.100A.1.c.
  • c. OFPO Coordinator
  • * Ensure that the information is included in the next PDAS report. Coordinate actions with the Department of the Treasury (DT), the Resolution Trust Corporation, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve System.
  • * Obtain a list of affected beneficiaries, including identifying information (SSN and BIC).
  • * Coordinate actions with the Department of the Treasury (Treasury), the Resolution Trust Corporation (RTC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve System.
  • * Obtain a list of affected beneficiaries, recipients or representative payees including identifying information (SSN and BIC).
  • NOTE: DT furnishes detailed lists of involved payments within 30 days of the closing, unless SSA receives the information from Federal Reserve, the closed FI, or the Resolution Trust Corporation.
  • NOTE: Treasury furnishes detailed lists of involved payments within 30 days of the FI closing, unless we receive the information from Federal Reserve, the closed FI, or the RTC.
  • * Determine the effective date of the closing.
  • * Determine whether the closing is permanent or the closed FI is being purchased by another FI.
  • * Determine whether DT and Federal Reserve will designate another FI to receive and distribute direct deposits on behalf of the closed FI for a period of up to 120 days.
  • * Determine whether the closing is permanent or another FI purchased the closed FI.
  • * Determine whether Treasury and Federal Reserve will designate another FI to receive and distribute direct deposits on behalf of the closed FI for a period of up to 120 days.
  • * Determine whether FDIC or other Federal regulators are placing any restrictions or special conditions on withdrawing funds.
  • * Gather any other pertinent information.
  • * Coordinate SSA's actions with those of DT, Federal Reserve, and other Federal agencies.
  • * Coordinate our actions with those of Treasury, Federal Reserve, and other Federal agencies.
  • * Remain in close contact with the Regional Commissioner(s) and RO staff to coordinate any necessary FO actions.
  • NOTE: Federal Reserve will reroute direct deposit payments, when another FI agrees to receive and distribute them, or stop all direct deposit payments going to the FI, when no other FI agrees to receive and distribute them or when the payments are dated more than 120 days after the FI closing. (The payments will be returned to DT and subsequently returned to SSA for reissuance).
  • NOTE: Federal Reserve will reroute direct deposit payments, when:
  • * another FI agrees to receive and distribute them,
  • * no other FI agrees to receive and distribute them (all direct deposit payments going to the FI stop), or
  • * the payments are dated more than 120 days after the FI closing. (The FI returns the payments to Treasury. Treasury subsequently forwards the returned payments to us for reissuance).
  • 2. Special Situations: FO/TSC/SPIKE
  • 2. Special Processing Situations for FO, TSC and SPIKE units
  • * Continue direct deposit without interruption when the closing announcement states that another FI has assumed the deposit liabilities of the closed FI.
  • Do not develop new payment addresses.
  • Do not develop for a new payment addresses.
  • NOTE: The “new” FI should use Notification of Change (NOC) procedures in GN 02402.105 to make any necessary changes to routing or account number information for depositors. Chapter 6 of DT's Green Book describes NOC procedures for FIs. GN 02402.095 describes how to obtain a Green Book.
  • NOTE: The “new” FI should use Notification of Change (NOC) procedures in GN 02402.105 to make changes to routing or account number information for depositors. Chapter 6 of Treasury’s Green Book describes NOC procedures for FIs. GN 02402.095 describes how to obtain a version of the Green Book.
  • * Continue direct deposit on an interim basis when the closing announcement names another FI to accept and distribute payments directed to the closed FI for up to 120 days. Develop as follows:
  • * Use available media sources to notify direct depositors that they can receive payments by check from the designated FI. Describe the locations of branches participating in the distribution if the depositor must appear in person to receive the check.
  • * Advise direct depositors about acceptable evidence of identity when the depositor must pick up the payment from the designated FI.
  • * Inform direct depositors about acceptable evidence of identity when the depositor must pick up the payment from the designated FI.
  • * Use the Critical Payment System (for title II) or immediate payment procedures to pay direct depositors who cannot visit a branch of the designated FI in person. Contact the parallel FO to notify the FI to return the regular payment.
  • * Develop for new payment addresses and input the changes immediately.
  • * Ask the FI to notify the FO when the FI will return payments not picked up by direct depositors.
  • * In addition, notify the PDAS coordinator, but do not do any special development in the following situations:
  • * Notify the RO PDAS coordinator, but do not do any special development in the following situations:
  • * rumored FI closing,
  • * restrictions placed on withdrawals,
  • * “Bank holiday” declared, which closes the FI temporarily, or
  • * conservator appointed for the FI.
  • Process any request for a change of payment address received in these situations.
  • 3. Media Inquiries
  • Refer all media inquiries to management to coordinate with the Regional Public Affairs Officer.
  • NOTE: Sensitive public issues may be involved, including the privacy of information concerning names and account numbers.
  • C. PROCESS
  • B. Processing Returned Payments
  • Payments may be returned after an FI closing because:
  • SSA can receive returned payments after an FI closing because:
  • * No FI agrees to receive and distribute direct deposit payments on behalf of the closed FI,
  • * The depositor has not visited the designated FI to receive payment, or
  • * The designated FI will no longer receive and distribute payments. The FI may perform this service for up to 120 days.
  • 1. Title II Cases
  • When a payment is returned, the system may reissue the payment or suspend benefits, as follows:
  • * New address/direct deposit data is on the MBR - The Return Check Action Program (REACT) redirects the payment to the new payment address. This can take 2 to 3 weeks.
  • * An EFT payment is returned, but no direct deposit data is currently on the system (direct deposit has been cancelled) - REACT redirects the payment to the mailing address when the record is in current pay. This can take 2 to 3 weeks.
  • * No new address/direct deposit data is on the MBR - REACT:
  • When the FI returns a payment, the system may reissue the payment or suspend benefits, as follows:
  • * When a new address or direct deposit data is on the MBR - the Return Check Action Program (REACT) redirects the payment to the new address. This can take 2 to 3 weeks.
  • * When the system returns an electronic payment and no direct deposit data is currently on the record (direct deposit has been cancelled) - REACT redirects the payment to the mailing address when the record is in current pay. This can take 2 to 3 weeks.
  • * When there is no new address or direct deposit data on the MBR, REACT:
  • * Advises the PC of the returned payment, and
  • * Suspends future payments.
  • The PC:
  • * contacts the beneficiary about the returned payment and asks for a new payment address, and
  • * inputs the new payment address when received.
  • * Dire need - If the beneficiary is in dire need or a public relations problem exists, the FO or foreign field office (FFO) uses the immediate payment process (see RS 02801.010). If the information is received in a TSC or SPIKE unit, the TSC/SPIKE refers the beneficiary to the servicing FO for an immediate payment.
  • * The PC contacts the beneficiary about the returned payment and asks for a new payment address, and
  • * Inputs the new payment address when received.
  • * If the beneficiary or representative payee is in dire need or a public relations problem exists, the FO uses the immediate payment process to issue an emergency payment (see RS 02801.010). If the TSC or SPIKE unit receives the information, the technician refers the beneficiary or representative payee to the servicing FO for an immediate payment.
  • 2. Title XVI Cases
  • When a payment is returned, the system may reissue the payment or suspend benefits, as follows:
  • * New address/direct deposit data is provided - The system recomputes and reissues payment to a new payment address when the record is in current pay. This may take 2 to 3 weeks.
  • * No new address/direct deposit data is provided - The system suspends payment. The FO gets new direct deposit/mailing address information as soon as possible.
  • * Dire need or public relations problem - The beneficiary is referred to the servicing FO for an immediate payment and possibly an A-OTP. (See SI 02004.100).
  • When the FI returns a Title XVI payment, the SSR system may reissue the payment or suspend benefits, as follows:
  • * When new address or direct deposit data is on the SSR - the system recomputes and reissues payment to a new address when the record is in current pay. This may take 2 to 3 weeks.
  • * When there is no new address or direct deposit data on the record, the system suspends payment. The FO contacts the recipient or representative payee to get new direct deposit or mailing address information and inputs the new payment information as soon as possible.
  • * When there is a dire need or a public relations problem the TSC or SPIKE unit should refer the recipient to the servicing FO for potential immediate payment or an A-OTP. (See SI 02004.100.)
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