Wednesday, December 17, 2008

What if the feds take over your client's bank?

I had an interesting conversation today with one of my clients. He is swimming nicely against the current, and is moving ahead and growing his payroll business. I say - good for him!

We were discussing the economy's effects on his clients and he mentioned that one customer had their bank taken over by the feds. This led to some interesting times as the takeover seemed to protect the client, while at the same time really screwed up the direct deposit process.

Apparently the feds left the account numbers in place, and changed the routing number, told the client to change it, the client did, then the DD didn't make it through and they said 'why did you change that number?'...

Needless to say, even if my rough translation of the story is only slightly accurate - if your client's bank closes shop, it is time to pay very close attention to the process.

I am hoping to get a more detailed report from my client and to update this posting with the true-gritty details... feds running around with fliers telling everyone that, "its gonna be all right... you're federally insured!"

This could be a great time to explain how holding their tax payments in your escrow trust account is a great way to avoid burrying the payroll in the backyard until payday!

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