May 2
In a letter to FDIC-supervised banks, the agency highlighted the basic risks of
extending credit to consumers with incomplete or tarnished credit records who are unable
to obtain traditional financing. A number of financial institutions involved in
"subprime lending" were not properly assessing or con-trolling the risks and
were suffering substantial losses, damaging some institutions' overall financial
condition. The FDIC outlined general controls believed necessary to effectively manage
those risks. (click here)
May 9
The Federal Financial Institutions Examination Council issued guidance on the activities
necessary for insured financial institutions to make computer systems capable of
recognizing dates in the Year 2000 and beyond. Most computers store dates with only the
last two digits and cannot distinguish 2000 from 1900. Unless bank computer systems are
corrected, institutions face substantial risks from faulty accounting and recordkeeping to
system shutdown. (click
here) |
|
June 1
Andrew C. Hove, Jr., became
Acting Chairman of the FDIC for
the third time, succeeding Ricki
Helfer, who left the Corporation
after more than two and a half
years in the agencys top job.
(click here)
July 30
Acting Chairman Hove told Congress that FDIC-supervised banks are generally aware they
face serious disruptions if their computer systems are not modified to handle transactions
starting January 1,2000. However, senior management and outside directors
may not have the in-depth technical knowledge to appreciate the extent
of the risks posed by Year 2000 noncompliance. The FDIC is monitoring the situation closely
and will take supervisory action, including enforcement action, if banks do not address the
problem, Mr. Hove reported.
(click here)
August 7
The FDIC and the Office of Thrift Supervision teamed up to provide bank branch data on the
Internet. With the new "Bank/Thrift Deposit Inquiry" service, this information
is available to the public in one place for the first time.
(click here) |
|
November
17
The FDIC and the Georgia Department of Banking and Finance jointly issued cease and desist
orders against three affiliated Georgia banks in the government's first enforcement
actions to address Year 2000 compliance in the banking industry.
(click here)
November 21
The first BIF-insured institution failed in the U.S. since August 1996. This was the only
bank failure in 1997. No SAIF-insured institution failed during the year.
(click here)
December 9
The Board approved a 1998 budget of $1.36 billion for the agency, $255 million (16
percent) less than the amount planned for 1997.
(click here) |