ALBANY, N.Y. (NEWS10) – In a filing to the Securities and Exchange Commission, Pioneer Bank says it is currently evaluating its exposure following the closure of MyPayrollHR.
According to the filing, Pioneer Bank says its “potential exposure” is in a $36 million commercial loan, of which it paid $16 million. It also noted a “potential exposure” in $19 million deposit activity.
Last week, MyPayrollHR informed clients it was no longer able to process any further payroll transactions.
Cachet Financial Services out of Panacea, California was a middleman of sorts between MyPayrollHR and its clients. Cachet is responsible for direct deposit for thousands of workers across the country whose employers use MyPayrollHR for payroll.
Cachet alleges due to a complex bank coding change, $26 million bound for direct deposit disbursement instead was rerouted to a Pioneer bank account in MyPayrollHR’s name.
Pioneer Bank says it is working with the authorities in connection with the matter. Based on its investigation, Pioneer says it believes this incident is isolated involving a customer and related entities.
On Wednesday, the FBI announced it is opening an investigation in the payroll company. Any businesses affected are urged to contact them.