Y2K - Bank Liquidity
And Power Outages - Forced
Savings Accounts Coming
From: Jerry Glass
To: AMERICAN BANKERS ASSOCIATION
RE: "Cash Demand and Liquidity Risk Issues and Year 2000 Readiness"
5-20-99
Dear Mr. Garza:
In reference to your article and Y2K bank readiness, I have located a glaring problem. Moreover, a survey sent to the Y2K Compliance Departments at California's fifty (50) largest banks drew zero (0) response.
At issue -- Y2K bank readiness is addressings computer upgrades and testing, cash availability, personnel training, customer and public relations. However, the banking community it is not addressingy nor providing for power outages.
While the banking industry is firmly committed to achieving compliance, not one of the nations 3400 electrical utility companies is compliant. Having already missed their deadline your Phase 4 testing (they are still in Phase 1), their experts estimate 90% readiness. But, they also state that outages are possible over a 30 month period.
My survey question to the banks: "should a blackout occur, does your bank have battery back-up generators to stay opened and operational?"
Mr. Glaza, other California industries surveyed answered; however (as stated above), banks have not What is the American Banker's Association perspective on both the banks and on the issue presented?
Best regards, Jerry Glass
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Forced "Linked" Savings Accounts Coming
From: Matt Ridgway
Is anyone else out there aware of this sort of fund shuffling?
According to the National City Bank of Michigan's Rules for Personal Accounts (71-0424-20 (Rev. 04/99)effective 7/1/99: (and I quote) " A special linked savings account is opened with every checking account except for the National City Sweep Account and the National City Asset Management Account.
At the beginning of each statement period funds in each checking account that are in excess of a threshold balance as established by the bank from time to time in it's discretion, are swept automatically into the linked savings account. If during any statement period the funds in the checking account fall below the floor balance then the funds in the savings account, if any, are automatically swept back into the linked checking account to restore the threshold balance. On the 6th such sweep during a statement period all the funds in the savings account will be returned to the savings account. You cannot directly access the linked savings account.
Each checking account and its linked savings account are treated as a single account for purposes of record keeping, fees and the linkage of the accounts will not affect your use of the checking account. Please note that as required by federal regulation, the bank reserves the right to require 7 days written notice from you of intended withdrawals from any savings account."
What more could I add to this statement that could elaborate any more effectively than the bank already has? They will take your money when and if they feel like, most probably earn interest on it that you will never see, and if you don't like it and want to remove your funds you'd best be prepared to alert them 7 days in advance in writing or they won't even give it to you.
I suggest that everyone, for their own good, check with their banking institutions and find out if this unbelievable activity is in your future as well.
Thanks to Brian Howard for providing the National City Bank Pamphlet from which I quoted.
Matt Ridgway
-- Andy (2000EOD@prodigy.net), May 22, 1999
Hello,
Yes, I went through this discovery a few months ago - just about blew
a gasket when I realized that with all the concern about public panic
and shortages of cash on reserve that they would take advantage of
another loophole and reduce their reserves even further! I spent
hours talking to Wells Fargo about it and no tellers were even aware
of it. I had to insist on speaking to higher ranking staff because
tellers were dumbfounded or worse (telling me all sorts of rediculous
explanations). Grumble, grumble......by the way the local credit
union management assured me that they will not be doing this - moving
my accounts now. Probably won't help if all the "banks" get caught
with their shorts down but at least I am making a statement!
Thanks for posting this Andy, I wish more people would begin to grasp
(which is all I have done) the vulnerablity of our fractional reserve
system AND to realize the greed of the powers-that-be at the top.
-- Kristi (securx@Succeed.Net), May 22, 1999.
Andy,
Yep, we had moved funds out of a CD to a checking account when the CD
was up for renewal, giving up the interest so we could have instant
access to the $$ when desired. Our S&L was taken over by Washington
Mutual Bank FA, and we recently received a 38-page booklet full of
fine print called, "Account Disclosures and Regulations."
Because of recent messages concerning the issues you raised, I
decided I'd better read through the book, even though it was about as
much fun as a root canal. Sure enough, on page 16:
"All checking accounts, except Business Checking, will consist of a
master account and two subaccounts: (1) a checking subaccount and (2)
a money market deposit account ("MMDA") subaccount. You will access
your checking account at the master account level, and your monthly
statement for checking accounts will reflect transactions at the
master account level without reference to the subaccounts. The
subaccounts are maintained on the Bank's books, and you will not have
direct access to the subaccounts.....
"At the beginning of each statement cycle, the Bank will allocate
funds between your chekcing and MMDA subaccounts as it deems
appropriate to meet your transactional needs. Periodically, we will
transfer funds in your chacking subaccount to the MMDA subaccount
when such funds are not needed to pay checks.....
And then back on page 7 under Money Market Deposit Account: "The
bank reserves the right to require written notice seven (7) days
prior to any withdrawal or transfer from this account."
Since my account is nearly inactive, they could conceivably place
nearly all of the funds in the MMDA subaccount, according to their
stated policy.
I would never have bothered to read that booklet if I hadn't read
about the possibility of this happening on internet y2k sources --
perhaps on this forum, I don't recall. What percentage of the public
will realize this is being done to them until they need their money?
That 7 days, when things begin to get wild, will give EO Clinton
enough time to declare an emergency and quite possibly invoke even
longer waiting periods, or far worse.
More and more, the behind-the-scenes actions of the government,
banking, etc. suggest that they are not expecting the "nothing to
worry about" scenario they are peddling to the public.
-- Randy (randy@home.now), May 22, 1999.