SVB’s New Owner, the FDIC, Gives Workers 45 Days of Employment

(Bloomberg) — The Federal Deposit Insurance Corporation added a few new employees to its payroll late Friday, taking on workers from shuttered SVB Financial Group, at least for a few weeks, as it serves as receiver of the collapsed lending institution.

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The newly-formed entity, the Deposit Insurance National Bank of Santa Clara, or DINBSC, sent a letter to employees offering 45 days of employment, according to a copy of the message seen by Bloomberg. After the 45 days, the employees will be let go, the letter states.

The company and its subsidiaries had more than 8,500 employees worldwide as of Dec. 31, according to its annual filing. SVB’s main office in Santa Clara, California, and all branches will reopen on Monday, the FDIC has said.

Read more: SVB Depositors, Investors Tried to Pull $42 Billion Thursday

The FDIC wants to incentivize workers to stay at the bank for those 45 days, offering salaried employees 1.5 times their current wages. Hourly workers who take on overtime will get double pay for it, according to the offer.

The arrangement is not unusual, according to the FDIC, the US federal agency that insures deposit products, such as savings accounts and money market accounts, up to a certain level.

“It is standard practice for us to ask employees to work with us during the resolution process,” said a spokesperson from the FDIC. “It is one of the first things we do after being named receiver.”

Silicon Valley Bank was seized by regulators Friday amid a run on deposits and an aborted push to raise capital. Its collapse marks the biggest failure of a US bank since the financial crisis.

The FDIC is now aiming to find buyers for the firm’s various businesses to return as much of clients’ money as possible.

Read More: SVB’s Auction Block Includes VC-Focused Lender, Wealth Unit

A higher salary and potential continuation of benefits, which are being sorted over the weekend, leave the company’s employees in a difficult position: quit now and look for new employment or stick around and hope DINBSC finds buyers.

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