To the Chief Executive Officers of All State Member Banks, Bank Holding Companies, Edge and Agreement Corporations, and Branches & Agencies of Foreign Banks in the Second Federal Reserve District, and Related Vendors and Service Providers:
The Federal Financial Institutions Examination Council (FFIEC) has issued answers to frequently asked questions on Year 2000 contingency planning. The FFIEC Q&A on Contingency Planning clarifies expectations for completing remediation and business resumption contingency plans and it supplements previous FFIEC Year 2000 guidance. The following is from the FFIEC's announcement:
"Financial institutions are expected to substantially complete the four phases of the Year 2000 business resumption contingency planning process as soon as possible, but not later than June 30, 1999," according to the FFIEC Q&A document. The Year 2000 business resumption contingency plans should be updated as needed, and senior management and the board of directors should review and approve Year 2000 contingency plans.
The FFIEC Q&A document notes that "establishing meaningful and practical business resumption contingency plans is an essential component of the risk management process for addressing Year 2000 problems." Among other things, the FFIEC Q&A document states that financial institutions should consider the following in developing Year 2000 business resumption contingency plans:
- Seek ways to educate customers about the Year 2000 problem and explain what financial institutions are doing about the problem in order to minimize unwarranted public alarm;
- Consider the cash demands of a financial institution's customers;
- Anticipate funding needs in late 1999 and early 2000;
- Train financial institution employees to ensure that they are prepared to implement Year 2000 business resumption contingency plans; and
- Validate the Year 2000 business resumption contingency plan using an independent and qualified source.
Additional information on this matter can be obtained, at this Bank, from Sarah Dahlgren, Vice President, Bank Supervision Group, or from Ira Adler or Joseph Galati, Examining Officers, Advisory and Technical Services.