"Year 2000 Readiness Disclosure"
To the Chief Executive Officers of All State Member Banks, Bank Holding
Companies, Edge and Agreement Corporations, and Branches and
Agencies of Foreign Banks, in the Second Federal Reserve District:
The following is from a statement by the Federal Financial Institutions Examinations Council (FFIEC):
Federal bank, thrift, and credit union regulators have announced that 99% of federally insured financial institutions have completed testing of critical systems for Year 2000 readiness. In their announcement, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision noted that most financial institutions are already using Year 2000-ready systems on a daily basis without problems.
Over the past two years, federally insured financial institutions have been identifying and overhauling systems that were not Year 2000-ready. At the same time, the regulatory agencies have been closely monitoring their efforts. As of June 30, 1999, the regulators had assigned a "Satisfactory" rating (the highest possible rating) to 99% of the federally insured financial institutions. This means that the financial institutions are appropriately preparing for the Year 2000. The agencies are confident that, based on their reviews, financial institution customers will be able to conduct business as usual both before and after January 1, 2000.
During each Year 2000 review, regulators look at the overall progress that an institution is making in its Year 2000 efforts, as well as its compliance with federally mandated requirements. Examiners check to see that financial institutions are performing any ongoing system renovation and testing that may be needed, establishing comprehensive contingency plans, mitigating any identified Year 2000-related business risk, and effectively informing their customers of their Year 2000 preparations.
The federal bank, thrift, and credit union regulators are closely supervising the few institutions that are lagging in their Year 2000 preparations. Regulators will increase and intensify their supervision of these institutions during the remaining months of this year to ensure that needed corrections are made by December 31, 1999.
If you have any questions, please contact, at this Bank, Sarah Dahlgren, Senior Vice President, Bank Supervision Group , or Ira Adler or Joseph Galati, Examining Officers, Advisory and Technical Services, Bank Supervision.