10/26/99 - Albany, N.Y.-Area Bank to Discourage Y2K Cash Withdrawals
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Oct. 25 (Times Union/KRTBN)--Planning to make a large cash withdrawal from Cohoes Savings Bank before New Year"s Eve? You"ll most likely get an earful before you get your money.
The bank is one of hundreds that has made tellers the last defense against people emptying their bank accounts due to the Y2K computer problem.
Doing all they can to eradicate Y2K fears, banks are training their staff to watch for uncharacteristically large cash withdrawals.
When tellers notice such activities, they"ve been taught to reassure the customer about the bank"s Y2K compliance -- and to try to persuade them to leave their money where it is.
At Cohoes Savings, for instance, a large cash withdrawal could prompt a teller to casually inquire, "Is this for a purchase?" If it isn"t, said president and CEO Harry Robinson, counseling will follow.
No bank can stop you from taking out your own money, of course.
But they can still try to change your mind.
"At home under the mattress is not the place for money," Robinson said.
In the past few months, education has been a big part of banks" Y2K work.
Who hasn"t received pamphlets with their monthly statements, talking about their bank"s Y2K readiness? Who hasn"t seen the reassuring Y2K posters in the lobbies? Some banks, like Cohoes, even held a public meeting to talk about it.
If such efforts don"t work, the tellers -- otherwise known as customer service representatives -- will do the rest.
"Most of our customers are not real worried about it," said Debbie Roylance, a teller at Cohoes.
"The ones that are, we just basically just tell them: "Remain calm."" Banks are required to inform the Internal Revenue Service if a customer takes out more than $10,000 in cash from their account.
But sometimes even smaller withdrawals are enough to raise the eyebrow of a teller, prompting an inquiry.
At some banks, $2,500 could be enough.
Jane Cordts, vice president of Troy Savings Bank, said the bank has always asked its tellers to watch out for suspicious withdrawals, especially among elderly people who may be vulnerable to scams.
The bank will give tellers an attentiveness refresher course soon.
"If something looks a little out of the ordinary, that"s when the red flags should be waved," added Samuel Capuano, vice president and Y2K coordinator at Ballston Spa National Bank, a place where the operator answers the phone with "Ballston Spa National Bank, we"re Y2K ready." Y2K is, as nearly everyone knows by now, the problem some computers have in dealing with the year change from 1999 to 2000.
The problem stems from some software programs confusing the "00" in 2000 with 1900, causing some programs to malfunction.
Some worry the Y2K "bug" could have catastrophic effects.
But in the past few years, governments and businesses have invested billions of dollars in repairing the problem.
Americans would be hard-pressed to find an industry more prepared than banks.
Strict government oversight demands banks report their Y2K work regularly.
And even if there was a Y2K problem, all records are backed up on hard copy, and the cash itself would still be in the vault.
Banks even have plans to open if the power goes out.
Furthermore, as banks are so happy to point out, individual accounts are ensured by the Federal Deposit Insurance Corporation up to $100,000 per person.
Some Y2K worriers have feared so many people will rush the banks before New Year"s Eve that the country could run out of cash.
That"s not likely, says the Federal Reserve Board -- there"s currently $200 billion in circulation, with another $200 billion in reserve vaults.
If banks lose cash, they also lose profit.
But today, banks say their biggest worry is that their customers will take out money and then lose it to a fire, burglar or scam artist.
Y2K scams have been spotted around the country.
Over the telephone, people have been asked for their credit card or bank account number, under the guise of fixing the problem.
One phone scam works like this: A caller tells a victim that their bank or credit card account is no good, and tries to get them to give their account number over the phone so they can "check." Others prey on the elderly, telling them paper money will be useless and encouraging them to mail their cash to a certain address to buy gold.
In most cases, those who reported the scams were not victimized.
Others have not been so lucky.
In Cramerton, N.C., last March, a man lost $15,000 in cash and coins when a teenage relative broke into a home filing cabinet.
The victim had withdrawn money from his 401K retirement fund to invest in gold and silver coins because of what he heard about Y2K.
And in Hong Kong recently, a woman handed over $15,440 to buy pills from con men who told her they would cure the millennium "bug."
Bank officials say that if they find out customers are taking out money because of Y2K, they often suggest alternatives.
Evergreen Bank, for instance, will recommend traveler"s checks.
Troy Savings Bank favors a cashier"s check.
And the Federal Reserve says other banks are recommending customers put their cash in a safe deposit box.
Of course, none of these options provide the comfort and immediacy of cold, hard cash.
A September poll by the Atlanta company Davis and Associates showed an estimated 31 million U.S.
households, just under one-third of the country"s population, plan to take a total of $32 billion out of the bank because of Y2K.
That"s about an average of $1,000 per household.
That study was based on interviews with 1,008 people.
Also, a recent poll of top corporate executives by CIO magazine showed that 34 percent planned to have more than $1,000 on hand.
And a Gallup poll released last month showed that 25 percent of those quizzed were planning to take extra cash out.
Genny Davis of Cohoes said she plans to take out enough money to last her six weeks.
And Joseph Falu, a CDTA bus driver, says he"ll take out all but $25 from his bank account, which is the minimum he needs to keep it open.
With luck, he added, he"ll go to the bank in January and find out he"s got $25,000 instead.
By Alan Wechsler
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(c) 1999, Times Union, Albany, N.Y. Distributed by Knight Ridder/Tribune Business News. END!A$2?AL-BANK-Y2K |
