|
| TO: |
CHIEF EXECUTIVE OFFICER |
| SUBJECT: |
Disclosures Involving Year 2000 Issues |
Issues related to the century date change and the impact on computer
systems and business operations are receiving prominent publicity and
attention. Depositors, business partners, investors, and the general
public are specifically interested in the effect on the financial
condition of each depository institution. The FDIC has previously
advised state nonmember banks and savings banks that safe and sound
banking practices require them to address Year 2000 issues.
In view of the importance of this issue, the Securities and Exchange
Commission (SEC) issued a revised Staff Legal Bulletin No. 5 to provide
specific guidance on disclosure associated with Year 2000 obligations
for companies registered under federal securities laws. Therefore,
FDIC-supervised institutions registered under the Securities Exchange
Act of 1934, as implemented by 12 CFR Part 335, or institutions selling
securities under an offering circular should prepare their disclosure of
Year 2000 obligations in public filings so that it is consistent with the
SEC's guidance. The disclosure should include:
-
The nature and potential impact of Year 2000 issues, as well as any
countervailing circumstances;
-
The institution's general plans to address Year 2000 issues, including
relationships with customers, suppliers, and other constituents;
-
The timetable for carrying out the general plans;
-
The total dollar amount that the institution estimates it will spend to
remediate its Year 2000 issues; and
-
Any impact that Year 2000 expenditures
are expected to have on the institution's results of
operations, liquidity, and capital resources.
The FDIC also strongly encourages other institutions to use the SEC
guidance as the basis for appropriate disclosure concerning Year 2000
obligations in publicly available documents reporting on the institution's
financial results for its fiscal year, beginning with 1997 reports. It is
recommended that disclosure of Year 2000 readiness be included in one or
more of the following: (1) the annual disclosure statement prepared by
each FDIC-supervised institution under Part 350 of the FDIC's Rules and
Regulations; (2) for an insured depository institution with $500 million
or more in total assets, its annual report prepared under Part 363 of the
FDIC's Rules and Regulations; or (3) its publicly available annual report
to shareholders.
As a reminder, institutions are required to make the annual disclosure
statement prepared in accordance with Part 350 available to the public
beginning no later than the following March 31 or, if the institution
mails an annual report to its shareholders, beginning no later than five
days after the mailing of such reports, whichever occurs first. The annual
report prepared under Part 363 must be submitted to the FDIC within 90
days after the end of the institution's fiscal year and be available to
the public no later than 15 days after it is filed with the FDIC. These
documents should then be available continuously until the report or
statement for the succeeding year becomes available.
For further information, please contact your Division of Supervision
Regional Office.
Additional information on the Year 2000 issue is available from the
Internet at:
fils
or http://www.ffiec.gov
|
Nicholas J. Ketcha Jr. |
|
Director |
Distribution: FDIC-Supervised Banks (Commercial and Savings)
NOTE: Paper copies of FDIC financial
institution letters may be obtained through the FDIC's Public
Information Center, 801 17th Street, N.W., Room 100, Washington,
D.C. 20434 (800-276-6003 or (703) 562-2200). |
