Uniform Retail Credit Classification and Account Management Policy
December 13, 1999
Circular No. 11217

Delayed Implementation Date for Manual Changes

To the Chief Executive Officers of All State Member Banks and Bank Holding Companies in the Second Federal Reserve District:

In Circular No. 11141, dated March 2, 1999, we announced the issuance, by the Federal Financial Institutions Examination Council (FFIEC), of a revised Uniform Retail Credit Classification and Account Management Policy. This revised policy updates and expands the classification policy for retail credit loans that was first issued in 1980. That circular indicated that the revised policy would become effective as of June 30, 1999 for banking organizations whose retail classification and charge-off policies and procedures are not automated. For institutions whose policies and procedures require adjustments to automated systems, the effective date would be December 31, 2000. This later implementation date for programming-related changes was established primarily due to concerns about drawing scarce resources away from the Year 2000 compliance effort.

The Federal Reserve and the other banking regulators have recognized that the two-stage implementation process imposes a shorter adjustment period on institutions that rely on manual processes. In addition, a number of comments from the industry were received by the Board of Governors subsequent to the publication of the revised policy calling for the delay of the implementation date for all insured depository institutions until December 31, 2000.

As a result, the FFIEC has changed the effective date for all aspects of the policy to December 31, 2000. The official notice of this action (pdf - 22kb), as published in the Federal Register of November 23, 1999 is available as a PDF file. During this delayed implementation period, the 1980 guidance will remain in effect for insured depository institutions until they implement the revised policy. Institutions that have already implemented changes to meet the revised guidelines (e.g., the re-agings restrictions) may continue to use their revised policies and procedures, but are not required to do so until December 31, 2000.

If you have any questions, please contact a member of the Financial Examinations portfolio management team responsible for your organization.