Business Journal of Milwaukee --Y2K fears prompt bank withdrawalsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
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August 16, 1999 Y2K fears prompt bank withdrawals Brad Hoeschen
Financial institutions are used to closing accounts because a customer is moving or wants the services available at a competitor, but recently, fears about the Y2K bug is being blamed as the culprit.
The state Department of Financial Institutions has declared that all banks in the state are prepared technologically for the change to 2000, but some customers are still closing their accounts.
Worried that a computer glitch could foul up bank records or even make cash inaccessible for weeks, some consumers are opting for having the money at home instead of in an interest-bearing account.
No statistics are kept on how much money is being withdrawn from bank accounts on fears about computer problems, but bankers said a few dozen people have probably already pulled their money out.
One Waukesha County man, who asked not to be identified because he doesn't want neighbors to know he has several thousand dollars tucked away at his home, said he decided to withdraw the cash simply as a precaution. He has purchased a generator and is beginning to store food in case of power outages, and holding cash is just another part of his plan.
Another Waukesha County resident said he is worried about the computer glitch holding his money hostage or losing account records altogether.
These concerns have surfaced despite numerous announcements from banks and regulators that their computers are ready to handle the changeover when the calendar changes to Jan. 1, 2000.
"We have had several communications with our customers, and we haven't heard zip from anyone about closing an account because of Y2K," said Martin Frank, president of Waukesha State Bank. "We have a standard policy of asking every customer why they are closing the account."
The two people who said they had closed their accounts to hold cash didn't tell their bank the real reason for withdrawing the money. Neither was a customer of Waukesha State Bank. Both had accounts with larger banks.
Financial institutions are likely to see more withdrawals between October and December, said Evan Bane, communications director for the Wisconsin Credit Union League in Pewaukee.
Some credit unions, which generally keep a small amount of cash on hand, are planning to increase the amount of cash kept in-house to handle withdrawals.
"Call it neurotic, or whatever, there are some people who just have general distrust of authority. And if they are customers, you have to give them the service they want," Bane said.
He expects most consumers will approach the millennium bug the same way they approach an approaching storm: Have extra food around the house and additional cash, just in case you can't get to a bank for a day or two.
"I would still want most of my money someplace safe," Bane said. "If I keep it at home, I have the new risk of fire, or that my neighbor will see me bury it in the back yard and then dig it up when I'm not looking."
Gaining confidence Regulators are confident that accounts won't be lost because of the Y2K computer problem, which could cause computers to think the year is 1900 instead of 2000 when the date changes at the end of 1999.
"In January, we started out kind of nervous," said Lisa Roys, a spokeswoman for the Department of Financial Institutions, which is responsible for making sure banks and credit unions are ready for the new year.
The department has been watching polls that show consumers gaining confidence in the safety of their money in light of the potential computer snafu.
Financial institutions acknowledge there will be a run on some assets, but probably not enough to create cash flow problems. Still, there will be issues to address next January when the money comes back into the system.
"Chicken Little will come back when he realizes the sky isn't falling, and there will probably be some competition for those deposits," Bane said. "Any bank or credit union that has trouble isn't likely to see the money again, so this is a good opportunity to improve customer confidence."
The main concern will be having enough staff on hand to take in the deposits that were withdrawn during the fourth quarter, he said.
"They will sheepishly ask for a certificate of deposit and we will be happy to help," Bane said.
-- ariZONEa (firstname.lastname@example.org), August 16, 1999
Hmmmm, can you say "trigger", boys and girls?
-- claire (email@example.com), August 16, 1999.
I think the real concern is people withdrawing money 12-30-1999. that'll be payday, and for most people, they have direct deposit, and they live check-to-check. As soon as that direct deposit is in there, you can bet they'll withdraw every last cent, as it isn't likely to be more than a couple thousand dollars at the most.
That's what i think is more likely than these people closing their accounts in mid august or late september or early November or something.
just my opinion.... can the banking system take that?
-- Super (Slfsl@yahoo.com), August 16, 1999.
I think people will withdraw money long before December 31, 1999. Word will get out sooner than that, and people who already suspect that money will be a problem at the bank, will start the run sooner. A another sign of this, is a prediction of a downturn in the stock market which is fueled by cash from banks, ie. savings, checking, CD's. Less money for the banks to invest.
-- JMHO II (JMHOII@JMHOII.com), August 16, 1999.
"Call it neurotic, or whatever, there are some people who just have general distrust of authority."
This is NOT about a distrust of AUTHORITY!
-- (firstname.lastname@example.org they?), August 16, 1999.
Hey, Bane. Yeah, you, Evan Bane, communications director for the Wisconsin Credit Union League in Pewaukee.
Making snide remarks about some of your customers don't exactly enhance the ol' customer service image, y'know? Maybe they don't trust you and your organization because you make arrogant comments to the media. Maybe they don't distruct "authority", they distrust supercilious suits who dismiss people who have genuine concerns about cascading systems failures as "neurotic" and "Chicken Little".
Maybe you need a good refresher course in public relations, friend.
-- Mac (email@example.com), August 16, 1999.
Bane. His name fits. "A source of harm or ruin: Curse."
-- Randolph (firstname.lastname@example.org), August 16, 1999.
"yes son, it is quite ok< Just start the corner of the bill and toss it on the pile. Maybe our homeowners insurance will cover the loss. NOT!!!"
"hey this stuff doesn't even stay lit, now what we gonna do?"
"it's getting reeealllly cold in here"
-- Michael (email@example.com), August 17, 1999.