Finance mortgage phh re

Sanwa awards two round-trip tickets to Hawaii

L.A. COUNTY - Intense competition is leading some local financial institutions to lure consumers with unorthodox bait - travel perks.

Los Angeles-based Sanwa Bank California has begun awarding new checking account customers with a pair of airline tickets good for round-trip travel to Hawaii. And three local thrifts - Chatsworth-based Great Western Financial Corp., L.A.-based California Federal Bank and Newport Beach-based Downey Savings & Loan - are participating in a new program sponsored by American Airlines that enables borrowers to earn mileage credits in exchange for interest paid on loans.

The offers come at a time when banks and thrifts are fighting harder than ever for new customers.

Tom Byrne, senior vice president of marketing for Sanwa Bank, said he expects the offer of free tickets to Hawaii to snare refugees from First Interstate Bancorp, which recently was acquired by Wells Fargo & Co.

Wells Fargo is closing several hundred First Interstate branches, resulting in a virtual feeding frenzy among Southland banks for disaffected First Interstate customers.

The tickets, said Byrne, are an attempt "to offer something of value to the consumer, to compete on value rather than sound bites."

Referring to the barrage of often negative advertisements launched by other local banks and thrifts in recent weeks, Byrne added, "You can't turn on the TV or radio without hearing someone bash someone else. We didn't want to join in on that. What we're trying to do is make a compelling offer."

Program conditions

The tickets to Hawaii are available to anyone opening a Sanwa checking account with a minimum balance of $100. There are, of course, a couple of conditions: Customers must maintain their account at Sanwa for a minimum of one month and agree to purchase seven nights of lodging at one of three hotels.

While travelers have until July 31, 1997 to take their vacations, they must make reservations by Sept. 6, 1996. There are no blackout dates. Sanwa has established a toll-free telephone number (1-888-TRIP-4-ME) to handle reservations and other travel-related questions.

The promotion was put together for Sanwa by Queen Baker India Inc., a Torrance-based promotions company. The offer ends June 28 and marks the first time Sanwa has attempted to boost its profile by offering travel perks.

Byrne refused to say how many new accounts the free airline tickets have netted so far. "We're happy with the initial indications," he said.

Great Western spokesman Tim McGarry was similarly coy about the response to that thrift's new travel program, through which borrowers earn American Airlines mileage credits in exchange for interest paid on loans. He said Great Western is "pleased" with the response.

"In a highly competitive marketplace, the best way to reach customers is to provide added value," said McGarry. "And in a mortgage marketplace in which most products are commodities with very little to distinguish them from each other, this gives us a way to distinguish our product."

Additional offers

Great Western isn't alone in the offer. Two other Southland lenders - CalFed and Downey Savings & Loan - as well as four others across the country, also are hoping to set themselves apart from the crowd with the program. Homeside Lending in Jacksonville, Fla., and Hunt Valley, Md.-based PHH Mortgage Services and PHH Real Estate Services also are participating.

Members of American Airlines' "AAdvantage Program for Mortgages" earn one mileage credit for every dollar of interest paid on a new mortgage loan on a new or existing home. Over the life of a 15- or 30-year loan, borrowers could earn hundreds of thousands of miles.

According to Great Western, for example, a program member with a $130,000 mortgage at 8 percent would accrue about 900 miles each month. Under American Airlines' current travel award program rules, 25,000 mileage credits earn a single round-trip ticket for travel anywhere in the continental United States or Alaska, and 35,000 mileage credits earn a single round-trip ticket to Hawaii. International travel is available for additional mileage credits.

The program has been in effect since April 8, and there is no deadline to participate. While Great Western expects the mileage credits to continue throughout the life of the loan, American Airlines has the right to cancel the program at any time with six months' written notice.