Here's the hype: Come Jan. 1, 2000, if you live in a small town,
the safest place for your money will be in old pickle jars buried
in your backyard (well, provided you don't tell your neighbors).
Luckily, many people aren't believing the hype. More importantly,
however, small-town community banks are going to great lengths to
make sure Y2K doesn't derail banking operations, or the public's
confidence in them. Allen Olson, president and CEO of Independent
Community Bankers (ICB) of Minnesota, said that the idea that small
banks can't handle Y2K problems "is absolutely pure fantasy."
"The small bank in Lake Wobegon is well prepared and [banks] know
it," Olson said. In fact, small-town community banks might very
well be the best prepared for Y2Knot only among financial
institutions, but all businesses in general. Government surveys
and independent rating agencies have put the financial sector at
the head of the class with regard to Y2K preparation. Much of the
credit for this goes to the Federal Deposit Insurance Corp. (FDIC),
the Federal Reserve and other regulators for establishing an aggressive
compliance schedule to get all banks and other financial institutions
up to speed on Y2K preparation.
"It's not often we congratulate the regulators," said Bob Vogel,
president and CEO of New Market Bank, in New Market, Minn. (pop.
227). But the early push for Y2K awareness by bank regulators, he
said, "got me going a year earlier than I otherwise would have."
Financial institutions across the country are following suit.
Two months before a compliance deadline of June 30 set by the Federal
Financial Institutions Examination Council, only about 200 of the
10,379 banks insured by the FDIC were lagging in Y2K preparation,
and only 19 banks were making "unsatisfactory" progress.
"We are doing a good job in Y2K," said Patrick Wick, president
and CEO of the Bank of Turtle Lake, in Turtle Lake, Wis. (pop. 817).
"Maybe because we're not as sophisticated [as larger regional or
national banks], it worked to our advantage."
After repeated testing of its computer systems, "We feel right
now we're basically ready," said William Stream, president and CEO
of the Peninsula Bank in Ishpeming (pop. 7,200), in Michigan's Upper
But challenges remain for community banks as the clock ticks toward
the millennium. Despite the fact that technical glitches have been
tested, corrected and retested for compliance in banks large and
small, a recent Gallup poll showed that a significant slice of the
public still believes Y2K will wreak at least some havoc on financial
institutions come Jan. 1, 2000.
Security risks and public awarenessof bank and personal
readiness for Y2Kalso will demand significant attention in
the coming months. According to Joel Gilbertson, executive vice
president of the ICB of North Dakota, "We don't have [Y2K] licked