STORY:
All But One-Percent Of U.S. Bank Y2K Ready

Non-compliant banks will be watched closely in coming months

In a move that should relieve fears of some anxious depositors, federal bank regulators say all but 1 percent of U.S. banks, thrifts and credit unions with federally insured deposits are Y2K compliant. In a press statement, the Federal Financial Institutions Examination Council said 99-percent of FDIC insured institutions met a June 30 deadline of fixing the computer Y2k bug in their systems.

"Most financial institutions are already using Year 2000 ready systems on a daily basis without problems," the FFIEC said in the statement. "The agencies are confident that ... financial institution customers will be able to conduct business as usual both before and after January 1, 2000."

Despite the announcement, the Federal Reserve will continue with its plan to print extra money for circulation in the fourth quarter of 1999 in anticipation of depositors withdrawing money because of the Y2K bug. Officials in both the private and public sectors of banks have said they do not anticipate any U.S. disruptions in financial services related to the computer Y2K bug.

Congress mandated that financial institutions and all federal agencies by Y2K compliant with mission critical systems by June 30. The programs had to be tested and proven to work properly when dates were forward to January 1st 2000 and beyond.

"The federal bank, thrift and credit union regulators are closely supervising the few institutions that are lagging in their Year 2000 preparations," said the FFIEC statement. "Regulators will increase and intensify their supervision of these institutions in the remaining five months."

The FFIEC includes representatives from the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision and National Credit Union Administration.

DATE: 08/03/99

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