Electronic Funds Transfers

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I have become addicted to EFT as a method of bill payment. My mortgage, gas, electric, cable and telephone bills are all paid by automatic EFT from my checking account. The newspaper and my ISP think they are automatically charging a credit card every month, but since I gave them the number for my debit card, it's essentially an EFT (at least from where I sit). To date, it has worked without incident for me and it's a great time saver. Then I got involved in Y2k discussions...

I am now giving *serious* consideration to cancelling these automatic transfers mid-1999 and not resuming them until all the parties involved convince me they have the bugs worked out of the system. I have seen a lot of info related to electronic interactions between banks and other institutions in general, but has anyone seen information related specifically to this sort of EFT?

-- Paul Neuhardt (neuhardt@compuserve.com), March 27, 1998


We refinanced our home in January. Instead of the usual computer generated payment notices we used to get, the banker gave us a book of payment coupons that looked like they were printed on one of those old mimeograph machines. No more neatly categorized computer printouts of the payment, escrow, balance on loan, etc. I found this extremely unusual. Since then I have kept a minimal amount of money in the bank and no electronic file transfers.

-- Gail (jmtomich@students.wisc.edu), March 28, 1998.

Gail, I wonder how usual (or unusual) that is, and if it may have been a temporary abberation at your bank. I have heard of banks that take a month or more to correctly set up new loans in their systems, but once that is done you get preprinted payment books and/or monthly statements.

About nine months ago, our mortgage bank divested itself of about 75% of it's mortgages over 5 years old by selling them to a bank in Houston. We got one of the old fashioned payment books and stopped getting the monthly statements that showed escrow balance, principle, etc. I was a bit non-plussed, but on investigation found out that the new bank was updating all of their loan systems and we would soon be getting the more modern statements along with the opportunity to use EFT. Sure enough, two months later came the monthly statements and EFT.

Why did the bank update it's systems? Well, I'm sure that the new systems provide a whole slew of functionality that the old ones didn't and that was a consideration. More importantly than that, I bet this bank found that replacing non-Y2K systems with newer, compliant systems was possibly cheaper and probably easier.

-- Paul Neuhardt (neuhardt@compuserve.com), March 28, 1998.

Paul, I stopped at the bank and they told me they don't sell their mortgages and told me I was given that strange payment book because it was easier for them that way. I Guess the only way to solve this is to wait and see what happens down the road!

-- Gail (jmtomich@students.wisc.edu), April 03, 1998.

You know Gail, I like that answer. "It was simpler" may be a phrase that helps solve a lot of the problems with Y2K. (Of course (it was simpler" may have induced some of the problems, but we won't go there right now.)

Complexity is what made the problem as wide spread as it is. The maze of interdependent systems and the tremendous increase in the use of computers over the last 30 years has led us to our current state. It's actually kind of refreshing to see the KISS method used (i.e. "Keep It Simple, Stupid"). I wonder just how many Y2K problems this kind of thinking will provide workarounds for?

-- Paul Neuhardt (neuhardt@compuserve.com), April 03, 1998.

You are right Paul, I think it best if we keep all those grannys in the lower level of the bank with their stamp pads. I wonder how many loan coupon books they can crank out in a day?

-- Gail (jmt@s.w.edu), April 03, 1998.

More than a dead computer.

I guess this goes to one of my problems with the "Y2K is going to end civilization" position, and that is the underlying assumption that society can no longer function without the stupid computers, even for a short period of time! True, I like modern life *with* computers a lot better than I would (will?) without them, but they are not essential to survival, or even to the operation of civilization. Human ingenuity being what it is, we ought to be able to find ways around our broken systems until we can fix them.

Ever see the movie "The Forbin Project?" We are not dealing with Collussus here.

-- Paul Neuhardt (neuhardt@compuserve.com), April 03, 1998.

Paul, your argument lags in one point! Where do we get all the people to replace those computers? I toured General Motors two years ago.(you have to see a place like this to believe it) A good share of the lines were run by robots and computers! You would not be able to afford the wheel on a car if the computers go! To answer your next point, there aren't enough horses and buggies either! :)

-- Gail (JMT@students.wisc.edu), April 04, 1998.

Yes, but you are still assuming the death of all of those computers, and I'm assuming illness at worst. I guess we'll all see soon enough.

-- Paul Neuhardt (neuhardt@compuserve.com), April 04, 1998.

Paul....you deal with BankBoston..right? Have you read this? Some interesting comments coming from them. I would not leave a penny in my account after reading this story! :) http://www.techweb.com/se/directlink.cgi?INW19980406S0039

-- Gail (jmt@students.wisc.edu), April 06, 1998.

This is a quote taken from a British newspaper April 7...........It's starting to hit the fan there already!.............

"Hundreds of companies are discovering that their software is unable to cope with orders in the next century,'' media reports said, adding that even senior executives of major British banks were saying that they would withdraw all their savings before the switchover as banks and other financial institutions would be the worst-hit."........

-- Gail (gmt@students.wisc.edu), April 07, 1998.


Okay, I read it. Let me see if I have all of this straight:

1) It would seem that Mr. McManus is admitting that the potential exists for date related problems in the banks systems. It also appears that he is willing to give at least some detail on how his bank is addressing the situation before problems occur and the contingency plans they are devising for after. You, and many others here, have regularly condemned people and institutions for trying to gloss over Y2K problems or failing to admit that such problems exist. Now however, you are also willing to condemn an institution that admits that there may be problems and shares information on how it is coping with those problems. In other words, there is no position other than the obvious falsehood of "we are completely fixed" for Mr. McManus to take that you would not condemn. Hmmm.

2) A bank as big as BankBoston has thousands of systems and millions, even billions of lines of code. To make a blanket condemnation of every system in the bank without having any information on the state of remediation of any one individual system shows, at best, a lack of objectivity. Mr. McManus does not identify any systems which may or may not have a problem. In fact, the quotes in that article do not state directly that there are any problems at BankBoston, just that problems are considered inevitable and are being planned for. I, for one, would much rather take my chances with someone that I *knew* was preparing for trouble and had the resources to deal with problems as they occur over a bank where I had to sit back and hope they were working on the problem. What is that phrase I hear around here so often, "Hope for the best, prepare for the worst?" It sounds to me like that is what BankBoston is trying to do. If so, how can you condemn them for taking the position that you advocate?

I could go on, but in the interest of space I wont. Suffice it to say that I believe taking all my money out of BankBoston because of that article would be extremely reactionary and unwarranted. And yes, I saw the smiley at the end of your message and realize that you might just be yanking my chain to get a reaction out of me. If so, it worked.

-- Paul Neuhardt (neuhardt@compuserve.com), April 07, 1998.

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