- The Washington Times - Wednesday, December 15, 1999

Peter-Paul Galus’ money won’t be under a mattress come New Year’s Day.
Instead, it will remain in the bank because Mr. Galus, an Arlington, Va., resident who stopped by the Union Station post office yesterday, believes the financial services industry is prepared to tackle the year-2000 computer bug.
Banks are comforted by pollsters who say the public has accepted their reassuring words about the new year. So some local banks are scaling back on the amount of money they plan to have on hand for Jan. 1. Washington-area banks do not plan to open on New Year’s Day, unlike some West Coast banks that will remain open on the holiday to address any customer concern that may arise.
Mr. Galus isn’t worried.
“I’m very confident. I’ve received a lot of notices from the bank,” he said.
Buoyed by consumer attitudes like Mr. Galus’, FCNB Corp., a Frederick, Md., bank, has reduced the amount of cash in its emergency year-2000 reserves. If FCNB comes up short, it plans to tap into cash stockpiles at the Federal Reserve.
“It appears less and less that it’s going to be a real issue,” said A. Patrick Linton, the bank’s president and chief executive officer.
The year-2000 bug is expected to strike when computer clocks roll over to 2000, confusing machines that were only programmed to deal with the last two digits of the year. But 99 percent of banks were ready for the glitch in August, according to a report by the Federal Financial Institutions Examination Council.
Though financial institutions’ computer systems may be ready, they still must address the question of public perception whether consumers, fearing bank failure, will withdraw large amounts of money. So far, mass withdrawals are not occurring.
Adams National Bank in the District has taken similar steps as FCNB.
“Our cash buildup was going to be based on needs of the consumer,” said Mary Mills, assistant vice president of information technology for Adams.
Customer demand for cash hasn’t gone up so far, and the bank has only had two inquiries about its year-2000 readiness both from customers who wanted to deposit, not withdraw, money.
Ms. Mills said Adams does have means to get more cash if necessary.
The government is also prepared to pay out more currency to banks. Last year, the Fed asked the U.S. Treasury to print $50 billion in additional bills to prepare for a possible year-2000 rush for cash. The agency is recommending that banks have a comprehensive year-2000-bug and cash-availability plan.
The Fed now has $200 billion in its coffers, and will pump that money out to banks if there is widespread panic around the new year. But most banks and regulators don’t expect that to happen.
“[Consumers] are not going to be withdrawing as much, or probably not at all at least not more than a regular holiday weekend,” said Fed spokeswoman Rose Pianalto.
Her predictions seemed to play out during an informal survey of Union Station patrons yesterday.
John McCargo, an Amtrak employee from Baltimore, said he is not planning to have extra cash on hand for New Year’s Day.
“I’m just going to make sure that all my accounts are up to date,” he said.
Linda Wilson of Northern Virginia said she will get more money out for a vacation.
“I’m not going to take any chances… . I just want to have a cushion,” she said.
Maryland resident Gerri Robinson laughed at the idea that she would clean out her bank account.
“I don’t think anything’s going to happen,” she said.
Many banks are still preparing just in case.
“We made our plans a long, long time ago and we’re sticking with them,” said Frank Small, executive vice president of the Sandy Spring Bank’s retail delivery group.
The bank has a contingency plan to open on New Year’s Day, a Saturday but Mr. Small doesn’t expect to have to implement it.
The bank will stock about 50 percent more cash than usual, both in branches and automated teller machines. For now, Mr. Small said, banks are playing a waiting game to see if consumer demand will explode.
First Virginia Banks of Falls Church is another company that hasn’t altered its date-change plan. The bank will have staffers present Jan. 1, but branches won’t be open. And bank management is figuring out how much additional cash to stock at each branch and ATM.
But all the more aggressive plans at local banks seem to be contingencies at this point. Even the Consumer’s Union, a District-based consumer advocacy group that zeroes in on public issues, is not concerned about banks’ readiness for 2000.
“It seems at this stage that everything is under control when it comes to the banks,” said Frank Torres, legislative counsel for the organization.

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