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NEW YORK – Even though Municipal Credit Union considers the story over and its general counsel no longer gives interviews on it, the ATM world still buzzes about the 4,000 Municipal members, out of 300,000, who significantly overdrew their credit union accounts in the wake of the September 11 attacks. “We pretty much consider that story as having past,” said Thomas Siciliano, Municipal’s general counsel and point man on the story, “and I am not giving any more interviews on it.” Siciliano said that he didn’t have any update on how much more of the credit union’s money might have been recovered since August 5, when the Manhattan District Attorney went public with the names of 101 credit union members who had either been arrested or were being sought for prosecution in connection to the thefts. But he did say the credit union’s collection department had been “very busy” with credit union members coming forward to settle their overdrawn accounts. Although 4,000 significantly overdrew, not all are being sought by the police. The reason? The 101 members being pursued withdrew at least $7,500 and did not cooperate with the credit union’s attempts to arrange repayment of the money. Cooperative overdrawn members had their negative balances turned into loans which could be repaid at a market interest rate, the credit union has said. Much of the published discussion of the theft has revolved around questions of how to prevent a similar occurrence from taking place again. Susan Zawodniak, vice president with NYCE and executive director of the NYCE Network was also unavailable for comment, but a NYCE spokesperson reiterated NYCE’s position that its “stand in” policy worked during the crises and that NYCE had done what it was supposed to do. Under a “stand in” policy a financial institution authorizes their network to allow withdrawals from its ATMs, up to a certain amount, without actually having to contact the financial institution to verify the funds are available. Municipal usually allowed its members to withdraw $200 per day under the policy and, 10 days after the attack, increased that amount to $500 per day in order to help meet the needs of its members, many of whom were police officers or firefighters and their families. This increased limit made it possible for those who stole to steal more, but didn’t necessarily explain how so many members were able to make withdrawals over the limit during any one business day, according to published reports. Zawodniak speculated that the credit union members who had the greatest overdrafts might have used multiple ATM cards to access their accounts. Multiple cards would not have triggered NYCE’s limits because they would have had different numbers. NYCE had no more information about investigations into this possibility. Nor was anyone available to comment on the possibility some transactions could have been timed to take advantage of the “business day.” One of the published reports discussed the possibility that if the “business day” ended in the afternoon, that might have allowed a withdrawal to the limit in the morning and then another withdrawal to the limit in the evening. One scarcely reported aspect has been the extent to which Municipal’s own record keeping froze in the wake of the attacks, which meant that the credit union may not have been able to verify the funds in a person’s account even if the connection to NYCE had not been lost. This could have been an important factor in the psychology of the theft since the account balances remained frozen at their pre-attack levels no matter how much money was withdrawn, creating an impression that one was getting away with something, a factor Siciliano admitted could have fed the thefts. Another strand in the public discussion has involved why 101 credit union members, who worked for hospitals, schools, even the police department, committed fraud on such a large scale. Experts quoted in one published report cited the possibilities that catastrophe could have given the culprits an increased feeling of entitlement. Additionally, the fact that the people were taking money from an ATM might also have played a role, Karen Franklin, a forensic psychologist in San Francisco told the American Banker. Although city rules prevented him from commenting for the record, a psychologist with Washington D.C.’s police department said that a “sense of unreality” in the wake of the September 11 attacks might have contributed to the thefts. “If you believe, in one sense, that a big part of the world you know is coming to an end then it’s much easier to say `anything goes,’ ” he noted. “ In that kind of circumstance who knows what might happen. Maybe the financial institution will fail. Maybe many will fail. Maybe insurance will have to step in to pick up the pieces.” He noted particularly that a similar impression might have been responsible for luring so many people who are otherwise responsible and law abiding to make the withdrawals. A sense the rules might not apply anymore can make looking after your own needs and seeking to protect your own situation seem honest and even virtuous, he said. [email protected]

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