Some Hold Back the Welcome Mat at Home Savings

News of Washington Mutual’s proposed takeover of Home Savings of America left many customers weary and frustrated, although some held out hope that Washington Mutual will build on its Pacific Northwest reputation for providing good service and low fees.

Relatively few customers interviewed Tuesday knew about Washington Mutual, which bought Irvine-based American Savings in late 1996 and Great Western of Chatsworth last summer. But given the overall spate of bank and thrift consolidations in recent years and the fallout from them, consumers did not welcome the news of yet another merger. And some could not contain their anger.

“This is ridiculous. That’s it, I’m going to close my account,” said an angry Dora Lorente, standing in a line of 10 people Tuesday afternoon at a Home Savings branch in Downey. Lorente, 36, was a customer of Coast Federal, but she complained that service had eroded after Home Savings’ parent, H.F. Ahmanson & Co., bought Coast last fall.

“When I first joined Coast Federal, it was a small . . . bank. Now, no matter what branch you go to, it’s very crowded, ugly and inconvenient,” she said.

Thus far, Washington Mutual has not prompted such harsh feelings from the average customer it inherited after acquiring Great Western and American Savings, at least judging by Washington Mutual’s high retention rate. The Seattle-based company has also added new customers by offering free checking accounts and generally lower ATM and other bank fees than some of its big bank rivals.

Since its merger with Washington Mutual, Great Western “has become more organized, even in how they set up the lines,” said Evelyn Gonzalez-Figueroa, a Great Western customer since 1985. “I’m not concerned with the new changes, as long as the service stays the same or gets better.”

Still, Washington Mutual has lost customers as rivals have exploited merger changes.

“We’re going to put on a full-court press,” said Milton Knox, vice president and marketing director at El Segundo-based Hawthorne Savings. Knox said his six-branch thrift has won over about 600 disaffected American Savings customers in the last year, with the help of such ads as those depicting the burning of savings passbooks after Washington Mutual got rid of them.

Gerri Giannini, 56, a Newport Beach real estate broker and property manager, and other former customers of American Savings also complained that it has become much harder to get information about accounts and transactions since Washington Mutual took over.

Because of his troubles and complaints, Washington Mutual sent Giannini a pair of binoculars and a telephone calling card, items Washington Mutual says it sent to a number of customers. Not appeased, Giannini sent the items back, and he made plans to switch accounts to Glendale Federal Bank, the mid-size thrift that has aggressively attacked big banks for merger problems. But he changed his mind after Glendale merged with California Federal Bank last fall, and turned to Plan B: switch to Home Savings.

But he said Tuesday, a bit exasperated, “I’m going to stay where I am temporarily and see how things go.” But he also added: “I don’t think we’re going to have any choices. That’s my biggest disappointment. I think competition is gone.”

By the numbers, competition has been more than halved in the last 15 years. Today there are about 50 thrifts or savings banks left in California, compared with well over 100 in the early 1980s, said Louis Nevins, president of the Western League of Savings Institutions in El Segundo.

But Nevins argued that consumers in California still have plenty of choices, at least compared with other states such as Nevada, where there is not a single thrift. Moreover, he said, thrifts, banks, credit unions and brokerages now offer many of the same products and services.

“I don’t think people are starving or lacking for banking services,” he said. However, Nevins still seemed to rue the fading of thrifts, which have traditionally been a major force in California and known to have a closer touch with local communities and provide friendlier service.

“No other state has seen the accelerated rate of consolidation in the thrift industry as California,” he said.

As that pace of consolidation has intensified, so has consumer inconvenience and consumer angst as well as confusion. Only in recent days have Coast mortgage holders received notices welcoming them to Home Savings.

Other Coast customers said they learned the hard way after discovering that their ATM cards suddenly were not working. That is what happened to Arlan Doane of Lake View Terrace.

“I spent a whole lunch hour in line here at Home Savings,” trying to get money, said Doane, a medical assistant supervisor who now plans to do his banking at his credit union. He did not want to stay with Home Savings. “I was very satisfied with Coast, but they couldn’t work a smooth transition in a month.”

It is mistakes like that that Washington Mutual will have to avoid if it wants to retain customers. Kerry K. Killinger, Washington Mutual’s chairman, has repeatedly said he wants to maintain a personal touch even as computers and technology change the way many people bank.

Times staff writers Vanessa Hua and Susan Abram contributed to this report.