A computer glitch last week left between 2,000 and 3,000 Iowa customers of Magna Group Inc. with useless teller machine and debit cards.

St. Louis-based Magna, which entered Iowa in March through the acquisition of $1.2 billion-asset Homeland Bankshares of Waterloo, converted the Iowa bank's computer systems to its own the weekend of July 19. But Monday morning, customers began calling the bank complaining that their cards were not working.

Mary Challender, a Magna customer in Des Moines, had a rude surprise last Tuesday. Ms. Challender, trying to buy gas at a convenience store, had her card rejected. "It said something like, 'No record of this account,"' she said. With no cash or credit cards, Ms. Challender was forced to call her mother to come bail her out. "I've come to trust the banking card 100%," she said.

Gary Hemmer, Magna's executive vice president of administration, estimated that 20% of its cardholders had difficulties. No customers of Magna's banks in Missouri or Illinois were affected, however.

The cause of the problem, which was still being ironed out on Friday, is a mystery, Mr. Hemmer said. "Call it a computer glitch," he said.

Mr. Hemmer said what's even more confusing is that the cards that wouldn't work included both those issued by Homeland and newly issued Magna cards. "Some cards work and others do not," Mr. Hemmer said. "It's got to be human error somewhere along the line."

Mr. Hemmer said the company has told complaining customers to go to their branches and get their cards activated. "I don't think we can correct it systematically," he said. Magna is sending letters to all its Iowa card holders to explain the problem.

Although it has had system problems in the past, $6.9 billion-asset Magna has never before had an error that rendered so many teller and debit cards useless.

"I've never seen a conversion without some small glitch," he said. "There's always things that have popped up."

"You don't like to see things go wrong in a merger integration," said Michael Ancell, an analyst with Edward Jones in St. Louis. "Generally, you haven't seen things like this or heard much about it lately."

Such problems are not without precedent, however. In May of last year, First Chicago NBD Corp. mistakenly credited 800 customers with $925 million each in their checking accounts.

Chemical Banking Corp. debited $15 million in total from 100,000 customer accounts in February 1994, causing some to bounce checks.

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