Local Banks Say They’re All Set for Y2K

The computers in Ventura County’s banks are ready for Y2K--the concern now is making sure that the customers are.

That’s the word from local banks, which say they’re virtually certain that they’re up to federal Y2K standards. Now they’re working to ensure that their account holders are just as confident, so they can avoid such potential disasters as a run on the bank or a credit crunch caused by investors dumping higher-risk bonds.

In line with last month’s speech by Federal Reserve Chairman Alan Greenspan, who warned that the computer bug’s potential pitfalls are mostly psychological, the county’s banks have stepped up efforts to keep borrowers and account holders in the know.

They’ve stuffed envelopes with fliers. They’ve printed signs. They’ve posted lengthy explanations of their preparations on Web sites.

But some bank officials still worry.

“There’s some percentage of our customers who will take out more money than they normally would,” said Al Todd, information technology manager at Santa Barbara Bank & Trust, which has a handful of Ventura County branches.

So his bank will have 50% more cash available for withdrawals--about $500 per account holder.

And while Jim Kelly, the financial controller at Ventura’s Affinity Bank, sees no doomsday scenario, he wants the bank to be ready.

“I think all it would take is some movie to come out and get everybody riled up,” he said.

Todd, for his part, assures the people who call his bank--concerned by extreme predictions of frozen bank accounts and disappearing computer records--that there’s nothing to worry about. He warns those who are convinced that a bedroom mattress is a safe place to store loot that emptying out their accounts just makes their money easier to steal.

“There are a lot of scam artists out there,” Todd said. “You can’t just have 5,000 bucks in your wallet.”

U.S. Treasury authorities nonetheless are printing about $50 billion in extra currency just in case, and the Federal Reserve Bank has established lines of credit for banks in need.

But in many ways, banks are the most prepared of any industry for Y2K, bank officials say. The Federal Deposit Insurance Corp. notified banks of their need to deal with the potential computer calamity in June 1996, well before the Y2K specter had reached household prominence.

By the summer of 1997, most banks were well ahead of the curve, and they now say that Y2K will cause no more inconvenience than any other long weekend.

“It’s the holidays, New Year’s weekend. Naturally, people are going to want extra cash,” said John Podlesni, the chief financial officer at Los Robles Bank. “The only thing you can do with customers and the populace in general is just keep them informed.”

Of most concern are the problems out of banks’ hands, such as electricity, phone lines and gas. And that’s what banks have been drilling for during the past several months, handling all work by hand for periods of time.

Affinity Bank will be conducting one such test this week.

“We’re assuming [during the tests] that we have no electricity or digital or analog phone lines,” he said. But when the day comes, “we’ll just be waiting for the ball to drop like everyone else.”

Nearly every county bank will have a team on-call during the rest of the world’s celebration, prepared to take over should the power go out. It’s nothing banks haven’t dealt with before. During one leap year, Santa Barbara Bank & Trust faced a mini-Y2K.

“It was panic city,” Todd said. “We fixed it in about 12 hours.”

Many large interstate banks have a team designated to deal with customers concerned about Y2K glitches.

Washington Mutual, for instance, has a team devoted to staffing a Y2K hotline--which took 250 calls last week, in addition to those that came in on the main customer service line--and to responding to missives from those concerned about what will happen when the numbers roll over to 2000, a spokeswoman said.

While locally based banks have not scheduled such resources for Y2K, they aren’t necessarily feeling less prepared.

“We have a great department,” said Podlesni of Los Robles Bank. “Any employee at this bank can talk to you about Y2K.”

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TAKING CHARGE

Leadership is a critical part of making work meaningful, columnist Gary Izumo writes. Ventura Business, B10