The Board of Directors and Chief Executive Officer of all federally
supervised financial institutions, senior management of each FFIEC
agency, and all examining personnel.
Financial Institutions Examination Council (FFIEC) has issued several
statements on the Year 2000 problem. These interagency statements
address project management phases, specific responsibilities of
the board of Directors and senior management with respect to business
risks, due diligence with respect to service providers and software
vendors, risks associated with financial institution customers,
and testing for Year 2000 readiness. On December 17, 1997, the FFIEC
issued business risk guidelines which required institutions to develop
strategies for responding to inquiries from customers and business
partners regarding the institution's Year 2000 readiness. Financial
institutions have a responsibility to provide forthright and honest
responses to questions and concerns that customers and business
partners may have concerning their financial institution's Year
2000 readiness. The scope of this guidance is customer awareness
(in contrast to business partner) policies. Institutions should
consider including the components described below in their customer
awareness programs, as appropriate.
financial institutions will look to institutions for assurances
that the institution is taking appropriate steps in preparation
for the century date change. This statement provides suggestions
for developing a customer awareness program and identifies issues
that financial institutions should be prepared to discuss with customers.
Program for Customers
expect financial institutions to develop a customer awareness program
which responds to questions and communicates with customers on Year
2000 matters. During on-site Year 2000 examinations, examiners will
be reviewing the adequacy of an institution's customer awareness
strategy. Effectively responding to customer inquiries also is in
the best interests of the financial institution. It can serve to
disclose to customers the institution's Year 2000 efforts and to
provide information on how products and services used by those customers
may be affected by the institution's readiness efforts. Ultimately,
achieving Year 2000 readiness and ensuring that customers and business
partners receive adequate information about an institution's efforts
is and must be the responsibility of a financial institution's Directors
and officers. Management is in the best position to know how the
Year 2000 date change will affect an institution=s operations, strategies,
resources and exposures, and how and when it would be best to respond
to the specific concerns of its customers.
The FFIEC agencies
are encouraging customers with questions and concerns about Year
2000 readiness to contact their financial institutions directly.
Financial institutions are of different sizes, offer different ranges
of products, and vary in the complexity of information systems.
This guidance recognizes these differences and provides the following
suggestions that can be used to develop a program to respond to
customer inquiries about the Year 2000 problem.
a customer awareness strategy, financial institutions should identify
those customers who should be proactively informed of efforts to
address business risks arising from the Year 2000 problem. Customers
may include depositors, borrowers, fiduciary clients, or others
who engage in transactions with the institution. Next, financial
institutions should consider the most effective ways of communicating
with various types of customers about the status of the financial
institution's Year 2000 readiness. Depending upon the institution's
size and business environment, possible methods include:
informational brochures or other written disclosures in monthly
or quarterly statements;
toll-free hotlines for customer inquiries;
to discuss the Year 2000 problem and efforts the financial institution
is taking to prepare for the century date change; and
Internet sites-or perhaps an exclusive portion of their existing
site-to inform customers of their Year 2000 preparedness efforts.
It is recommended
that financial institutions consult with legal counsel before issuing
information describing the status of Year 2000 readiness efforts.
awareness program should ensure that personnel who regularly interact
with customers are trained to respond appropriately to inquiries
by referring customers to appropriate explanatory materials or expert
financial institution staff. Institutions also may consider including
interested external parties (such as the news media and community
organizations in the financial institution's service area) in the
communication program, as appropriate.
customer awareness programs, financial institutions should consider
some of the issues customers may be interested in discussing and
effectively communicate with them about what could happen and what
they should do if problems do arise. Some potential customer inquiries
include concerns about:
of the money in their accounts.
their funds, such as access through ATMs, debit cards, telephone
lines or the Internet, and the arrangements the financial institution
will make to ensure alternative means of access to funds if disruptions
should withdraw some cash from their accounts prior to December
of information on or summaries of the financial institution's
Year 2000 project management and contingency plans.
deposit, direct debit and other automatic electronic payments
will be made on a timely basis and credited or debited accurately
to the proper accounts, and what arrangements the institution
will make to deal with such transactions should disruptions occur.
How the financial
institution will assist any customers who may be affected by incorrect
automatic transactions such as direct deposit and direct debit
initiated by the institution or by third parties.
might not receive proper credit for loan payments.
institution's record keeping practices.
of records customers should maintain prior to and after January
The FFIEC is developing
a consumer brochure that provides information to consumers about the
Year 2000 challenge. The brochure will explain the steps financial
institutions and the federal financial institution regulators are
taking to address the century date change and emphasizes that the
Year 2000 date change will not affect deposit insurance coverage.
Financial institutions may wish to use the brochure as part of their
communications with customers. The brochure will be available by June
1998. The federal financial institution regulatory agencies will supply
each institution with one copy of the brochure along with instructions
for ordering multiple copies, should institutions wish to provide
them to their customers.
are reminded that they may not disclose publicly the contents of federal
supervisory agency examination reports or reviews of the institution
or any service provider or software vendor, including the confidential
Year 2000 summary ratings contained therein. Thus, in designing their
Year 2000 public awareness plans and efforts, institutions should
be careful not to violate this prohibition. Moreover, they should
avoid any statements that indicate or imply that the institution's
readiness has been approved or certified by a supervising agency with
regard to its Year 2000 plan.
should develop a pragmatic strategy for responding to customer inquiries
about their institution's Year 2000 readiness. The guidance in this
interagency statement is designed to assist financial institutions
in developing their programs. Each institution may choose to tailor
its customer awareness program based on its own business environment,
but ultimately, it is essential that each institution develop a
program to address customer questions and concerns about the status
of Year 2000 readiness.