Community Members Grapple With Signature Bank Collapse

By Matis Glenn

Signature Bank branch on New Utrecht Avenue and 64th Street in Boro Park. (Google Maps)

Signature Bank, used by many in the Orthodox Jewish community, was open for business as usual Monday morning, following a weekend of turmoil and uncertainty.

Signature was seized on Sunday, following reports that it was in danger of going the way of tanked Silicon Valley Bank (SVB), which had collapsed on Friday. The fall of SVB marked the largest collapse of a bank in the U.S. since the recession of 2008, and began questions as to how international governments would deal with branches in their countries.

Although the FDIC insures accounts up to $250,000, many people and businesses — over 90% of accounts in SVB and close to 90% in Signature — had far more than that stored in the banks, leading many to wonder whether they’d see the rest of their money.

On Sunday, the U.S. Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. announced a rare decision, to the relief of clients, that all SVB and Signature accounts would be guaranteed.

The announcement was meant to ensure a seamless transition to a successor bank called Signature Bridge Bank.

At Signature’s Boro Park branch Monday afternoon, there were just a couple of customers making transactions, and none of the long lines of panicked depositors typical of a bank run. One community member told Hamodia that many customers had withdrawn their money over the weekend amid the initial panic. A bank manager at the branch declined to answer a Hamodia reporter’s request for comment.

A man was seen giving out TD bank business cards to people walking out of the Signature branch, apparently in hopes of taking advantage of customers’ concerns over the future of the bank and their assets.

Signature is used by many Jewish organizations and businesses, and is known for policies which benefit non-profit organizations, such as laying out money for checks in order to enable them to cover payroll on time.

Signature had marketed its services to other minority groups as well, including the Asian and Hispanic communities.

An official at a major Jewish organization, speaking on condition of anonymity, told Hamodia that the organization had decided to withdraw an account that they had with Signature, but weren’t able to do so before the bank was closed. However, they felt reassured on Monday as announcements came in from local and the federal government, promising people that their funds were safe. They have no plans to clean out their accounts at this time.

Chaim Berkovic, CEO of Skyscraper Insurance, told Hamodia that many people chose Signature because the bank made personal relationships with customers a high priority, and were accommodating to their individual needs.

“Many Jewish people had gratitude for them; they had good loan programs for real estate owners and mosdos with large balance sheets,” Berkovic said. “They worked with you to make sure you can cover your payroll on time, giving a few days credit to cover payroll before funds come in…they made personal visits, too.”

Customers also preferred Signature because of its wiring services.

“Signature would be able to wire money not just through a batch, which is what most banks do, where a certain amount of transactions go through every hour … if you came close to closing, your transaction could end up going out tomorrow; with Signature, they could rush a wire for you – it was all part of the warm relationship they tried to have with customers.”

Berkovic says that some large title companies are pulling out of Signature, because their investors, to whom they are beholden, are requesting it, but that some CEO’s themselves are comfortable staying. Berkovic says that the rumors of the bank suffered “probably more from the rumors of its collapse and subsequent withdrawals than anything else.”

A business analyst, who preferred to not be named, told Hamodia that he knows many real estate attorneys that previously used Signature for their escrow accounts who are in a rush to leave, due to the uncertainty of the bank’s future and ability to remain solvent.

For real estate, he says that attorneys preferred Signature because they allowed customers to print their own bank checks, and not have to go to the branch to retrieve them.

New York Gov. Kathy Hochul said Monday that the bank’s leadership will be totally replaced.

“People said that the management was top notch, so the question is that with the new people, how will things be changed?” Berkovic said.

A different business analyst, speaking on condition of anonymity, told Hamodia that Signature was a bank that had policies favorable to non-profit organizations, and did not subject them to the extra regulations and red tape that other banks demanded.

It was used so heavily by Orthodox Jewish organizations, schools, shuls, and businesses, that he estimates that between $2 and $7 billion in funds were held at the bank.

“The Orthodox community really dodged a bullet,” he said, referring to the government’s decision to guarantee all accounts.

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