Quake Plans Pay Off for Banks, Thrifts

Shortly after Tuesday’s massive earthquake in San Francisco, a private plane loaded with checks and bank deposit slips and other bank papers left the San Jose airport bound for Los Angeles. The paper work came from Northern California branches of Security Pacific Bank, which was scrambling to avoid a costly delay in crediting customer accounts.

Within minutes of the 5:04 p.m. quake, bank emergency teams had discovered that their Northern California processing center in Hayward had no power and couldn’t possibly process the day’s paper work. The teams, which had assembled at 5:15 p.m. in San Francisco and Los Angeles, according to a bank emergency response plan, had to get the papers fast to a processing center in Brea.

The San Francisco airport was closed, and commercial carriers were in disarray. The papers were immediately rerouted to San Jose, where a charter sped them on their way to the Southern California processing center.

“They were all processed last night. All customer accounts were credited on time,” Dick Warner, Security Pacific executive vice president, said.

The state’s major banks and savings and loans had emergency plans prepared when the quake struck, and the plans seem to have been effective. Backup systems for preserving computerized bank data were in place Tuesday and saved the day, although bank computers couldn’t keep some automated teller machines from failing.

Many institutions had regrouped overnight from various glitches and were prepared Wednesday morning to offer emergency loans to customers. The major concern during the day was accounting for Northern California workers and gathering data on damaged branch offices.

First Interstate Bank, which had its emergency plans tested during a disastrous fire at its downtown Los Angeles headquarters in April, 1988, “has a major investment in redundancy,” spokesman Simon Barker-Benfield said from the bank’s emergency communications center in downtown Los Angeles.

“We dump information from one system to the other regardless of what is happening. There is a constant interchange of information,” said Ed Pistey, the bank’s director of security, in explaining why the emergency team wasn’t worried about losing data when it assembled Tuesday evening. The bank was prepared to switch overnight data processing from Fremont in Northern California to a Southern California location, Pistey said. “But this time we were very fortunate. We had no problem up there,” he added.

The major operational problem for the institutions was the inability to open some branch offices and troubles with the indispensable ATMs that left some customers cashless for hours. The computers driving the networks functioned, bank officials said, but some individual machines were useless because electricity and telephone lines at the sites were knocked out by the quake.

Even a few customers in Southern California felt the impact. As part of its emergency plan, Wells Fargo Bank shut down its entire network of ATMs to prevent a crash. “We wanted to see if we had enough backup power to run the system. We did, and we brought it back up slowly,” spokeswoman Kathleen Shilkret said. By 1 a.m. Wednesday, 80% of the 1,250 ATMs were working, she said. By late afternoon, only 45--most in Northern California--of 527 locations were still closed, she said. “We anticipate being operational tomorrow. It’s a locational problem because of the power outages,” she said.

First Interstate said less than 20 of its ATMs were out of service, while Bank of America lost about 250 of its 1,500 machines.

Bank of America was also forced to switch some downtown San Francisco operations to other locations. “San Francisco foreign exchange customers are being served from the Los Angeles trading room,” spokesman Ron Owens said. “San Francisco securities trading is being conducted in a limited capacity from a backup facility in Concord, just east of (San Francisco). Securities trading in Europe and Asia was unaffected,” he added.

Owens said Bank of America branches in San Jose, Santa Cruz and Santa Clara suffered some physical damage, but the full extent of the damage wasn’t known. Security Pacific suffered damage at nine Northern California branches.