Y2K Keeping Banks Open on Jan. 1

Updated 3:26 PM ET December 13, 1999

By KIM CURTIS, AP Business Writer

SAN FRANCISCO (AP) - A number of banks are opening their doors for regular business on New Year's Day, a move designed to ward off a last-minute dash for cash and other worries about Year 2000 computer glitches.

"We've worked long and hard on getting our systems up to speed and Y2K-ready, and we don't expect any problems," said Scott Kisting, executive vice president at California Federal Bank, one of the nation's biggest savings and loans. "However, the Y2K issue has been such a hot topic in the press we can't ignore the fact that may people may have some concerns."

This customer-comforting gesture has not been embraced by many large, nationwide banks, though many smaller regional banks, including Summit Bank in the Northeast, Community First Bankshares in the Midwest and CalFed in California and Nevada, have opted to keep some branches open Jan. 1.

The coming of the year 2000 has prompted widespread concerns among people who fear computers will malfunction because they have been programmed to recognize only the last two digits of a year and may mistake 2000 for 1900.

"I think it's a great idea to stay open because a lot of people are concerned," said Derick Wilson, a CalFed customer.

But even professional doomsayers aren't worried that automatic teller machines will malfunction, bank accounts will go missing or loan applications will disappear.

"It's the most-checked Y2K industry out there," said James Wilson, who has published "Y2K News Magazine" since 1997. "If every other sector of the economy did what the banks did, there wouldn't been any Y2K problems."

Federal Reserve Chairman Alan Greenspan has said that banks will be the safest place for people to keep their cash at the end of the year. And Federal Deposit Insurance Corp. chairman Donna Tanoue says America's banks are ready for Y2K, with contingency plans that will allow them to take deposits and dispense cash even if all the computers go down.

"Although no one can say there won't be glitches, we're confident that bank and thrift customers and credit union members will be able to conduct business as usual come the new year," Tanoue said in a speech last month in San Francisco.

As always, it's a good idea to balance checking accounts and keep copies of bank statements, stock statements and other important documents, experts say.

"I'm personally not really worried about it," said Derick Wilson, a San Francisco interior designer. "I really feel the people in control of the banking industry are some of the wealthiest people in the country. They're not going to allow a Y2K glitch."

Even so, he plans to withdraw an extra $1,000 "because you just don't know."

In a Gallup Poll for the FDIC conducted in October, 39 percent of people asked said they would take out extra cash. That's down from 62 percent in March.

Even so, the Federal Reserve plans to make special loans to banks, savings and loans and credit unions that might need emergency money because of consumer fears about system breakdowns caused by computers unable to handle the date change.

Last year, the central bank ordered an additional $50 billion of new currency to put into circulation in case people make a run on banks and ATMs late in the year. By year's end, $200 billion in currency will be stored in government vaults, up from the $150 billion normally held in reserve. That is in addition to the $460 billion in notes circulating in the United States and abroad.

Nonetheless, some national institutions such as Citibank and Chase Manhattan Bank are taking the "business as usual" approach, saying their customers should feel more confident seeing normal operations on the much-dreaded holiday.

"On a Saturday or a Sunday people are not looking to walk into their local branch," said Chase Manhattan spokeswoman Lisa Selkin Lupo. "They want to get money out of their ATMs."

In response, Chase Manhattan, the nation's second-largest bank, will be fully stocking their ATMs in preparation for the holiday weekend and also have a plan in place to quickly refill them as often as necessary.

Seattle-based Washington Mutual is taking a similar approach.

"We may change our minds, but at this point we don't see a need to be open," said spokeswoman Libby Hutchinson. "We're going to be using that time to make sure they're ready for business on Monday. It's a bank holiday so we're treating it as such."

John Hall with the American Bankers Association in Washington D.C. said additional staffing will be commonplace during the holiday season.

"Quite a number of smaller banks ... have said they're going to be open. Some are, most aren't, but it doesn't mean just because they're not open for retail customers doesn't mean they don't have people back there working on the weekend."

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Ray

-- Ray (ray@totacc.com), December 13, 1999

Answers

They will do anything they can to give people the impression that everything is all right. Confidence is the glue holding the monetary system together.

I hope it works. I hope they're ready.

But me thinks they protesteth to much.

-- LM (latemarch@usa.net), December 13, 1999.

The say they're going to be open with no problems. They also said they'd be completely remediated by 31-Dec-1998. Koskinen and Greenspan say they'll be on planes. Clinton says he isn't making personal preparations. It's all just words.

18 days.

-- Servant (public_service@yahoo.com), December 14, 1999.