Surely RH risk management would see that both the 99% VaR and the gap risk have jumped, and draw the credit lines before their DTCC margin dried up? What's the worst that can happen if you top up the account a little more than you need? Whatever you save on interest can't be worth the reputation damage?
There must be more to this story, as other brokers got in the same pickle. Perhaps it is some modern form of balance management that the new guys prefer, akin to just-in-time.
Although I think you're underestimating the difficulty of pulling billions of dollars out of nowhere. Robinhood was forced to sell equity to meet the deposit requirements - that's a harsh ask.
And they did get a loan[0]. I think you overestimate the ability of Robinhood to get an infinite amount of money in debt from banks within a few days notice. Then they even sold more equity[1].
Not only are they probably not operationally prepared to just pull down credit on no notice, but there's an additional risk - the member's VAR calc is calculated using a EWMA (exponentially weighted moving average) volatlity estimate. What this means is that RH can exhaust its entire credit line, and despite allowing no additional buys, their deposite required still increases because volatility went up. Breaching DTCC's requirements with no way to fix the issue.
3% to 100% collatoral isn't covered by topping of the accounts though. RH was doing hundreds of millions (?) in $GME per day, so that increased that number from something like $3MM to $100MM.
There must be more to this story, as other brokers got in the same pickle. Perhaps it is some modern form of balance management that the new guys prefer, akin to just-in-time.