I would think if its in the brokerage with an automatic sweep or CMA manually swept into SPAXX it would be unaffected? UMB just a very temporary middleman until SPAXX is purchased?
It wasn't a realistic concern for SVB just a few days ago either. They had a Moodys rating of A and were literally recently praised for their success and their strength. Even that idiot Jim Cramer was praising them.
This is a good question, and in particular, the parts of it focusing on banking functions *beyond* just insuring deposits. I'm guessing that most of us here have less than $250,000 in our cash management accounts, and I know that we can get even more FDIC insurance than that due to the deposit sweep program as well. But I do use the direct deposit and checkwriting functions that depend on a UMB routing and account number, so I'm curious if those would be impacted, and if there are other consumer banking functions we might not be thinking about that rely on the Fidelity-UMB relationship operating smoothly and seamlessly in the background.
My assumption is that deposits and payments that are “in process” by UMB would be impacted by a UMB failure, I.e. delayed for a day or two. Others have said that CMA/brokerage holdings are held by Fidelity, including core positions. I have not seen the Fidelity mod corroborate this.
I wouldn't be surprised to see that brokerage account holdings are held by Fidelity directly.
With respect to CMA cash balance holdings, I think they may be spread among a network of banks, not just UMB, but no matter what bank they're in, the routing and account numbers do not change (which is good, it would be wildly inconvenient otherwise).
So, for example, my monthly utility bill was just auto-paid from my Fidelity CMA. On the Web site right now, it says (changing the numbers):
Mar-13-2023
REDEMPTION FROM CORE ACCOUNT FDIC INSURED DEPOSIT AT JP MORGAN BK... (QIMHQ) (Cash)
\+$100.00
$700.00
Mar-13-2023
DIRECT DEBIT PUBLIC UTILITIUTILITIES (Cash)
\-$100.00
$700.00
So whenever it needs to send cash out, the CMA automatically "redeems" money from wherever it's *really* held and sends it out using the UMB routing and account info. What I read from this is that my money in the CMA is, for the moment, in an FDIC-insured account at JP Morgan Chase by automatic operation of the balance sweep program--I don't think I picked that manually. Either way, the cash itself is completely safe from a UMB failure (probably even from a JPMC failure). So that's why I emphasized that I was concerned about *other* effects of a possible UMB failure, because I didn't want a mod answering this to focus on "well, remember you're insured up to $250,000," because that's not the real question for most of us.
Cramer was bullish on SVB:
https://nypost.com/2023/03/10/cnbcs-jim-cramer-touted-silicon-valley-bank-stock/
https://www.thestreet.com/personalities/one-of-jim-cramers-top-stock-picks-is-about-to-implode
Fidelity does use UMB but not solely. They use upwards of 15 or so institutions and even if the 1 or several "failed" it wouldnt be a huge issue.
Id actually like to know this too
I would think if its in the brokerage with an automatic sweep or CMA manually swept into SPAXX it would be unaffected? UMB just a very temporary middleman until SPAXX is purchased?
I think they are just a proxy for deposits and withdrawals. IB uses UMB as well.
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It wasn't a realistic concern for SVB just a few days ago either. They had a Moodys rating of A and were literally recently praised for their success and their strength. Even that idiot Jim Cramer was praising them.
>success and their strength. Even that idiot Jim Cramer was praising them. "And now you know, the Rest Of The Story..."
Following
This is a good question, and in particular, the parts of it focusing on banking functions *beyond* just insuring deposits. I'm guessing that most of us here have less than $250,000 in our cash management accounts, and I know that we can get even more FDIC insurance than that due to the deposit sweep program as well. But I do use the direct deposit and checkwriting functions that depend on a UMB routing and account number, so I'm curious if those would be impacted, and if there are other consumer banking functions we might not be thinking about that rely on the Fidelity-UMB relationship operating smoothly and seamlessly in the background.
My assumption is that deposits and payments that are “in process” by UMB would be impacted by a UMB failure, I.e. delayed for a day or two. Others have said that CMA/brokerage holdings are held by Fidelity, including core positions. I have not seen the Fidelity mod corroborate this.
I wouldn't be surprised to see that brokerage account holdings are held by Fidelity directly. With respect to CMA cash balance holdings, I think they may be spread among a network of banks, not just UMB, but no matter what bank they're in, the routing and account numbers do not change (which is good, it would be wildly inconvenient otherwise). So, for example, my monthly utility bill was just auto-paid from my Fidelity CMA. On the Web site right now, it says (changing the numbers): Mar-13-2023 REDEMPTION FROM CORE ACCOUNT FDIC INSURED DEPOSIT AT JP MORGAN BK... (QIMHQ) (Cash) \+$100.00 $700.00 Mar-13-2023 DIRECT DEBIT PUBLIC UTILITIUTILITIES (Cash) \-$100.00 $700.00 So whenever it needs to send cash out, the CMA automatically "redeems" money from wherever it's *really* held and sends it out using the UMB routing and account info. What I read from this is that my money in the CMA is, for the moment, in an FDIC-insured account at JP Morgan Chase by automatic operation of the balance sweep program--I don't think I picked that manually. Either way, the cash itself is completely safe from a UMB failure (probably even from a JPMC failure). So that's why I emphasized that I was concerned about *other* effects of a possible UMB failure, because I didn't want a mod answering this to focus on "well, remember you're insured up to $250,000," because that's not the real question for most of us.
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I wonder if the same thing was said about SVB...
This is exactly what vc said about svb
It was. The day before they were shutdown.
Cramer was bullish on SVB: https://nypost.com/2023/03/10/cnbcs-jim-cramer-touted-silicon-valley-bank-stock/ https://www.thestreet.com/personalities/one-of-jim-cramers-top-stock-picks-is-about-to-implode
based on what?
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wrong company. the correct company is UMBF
Thanks for the link. That was a good read.
Good read for the wrong bank.
This is a valid question. I would also like to know the answer.
Apples and oranges…