FEDERAL AGENCIES, FIRST DATA AGREE
ON Y2K READINESS DEADLINES
FOR IMMEDIATE RELEASE PR-16-99 (3-30-99)
Media Contact: David Barr (202) 898-6992
The federal financial institution regulators and First Data Corporation reached agreement today that the provider of data processing services to banks, thrift institutions and credit unions will complete Year 2000 testing of the last of six merchant processing systems that serve banking and credit union clients by June 30, 1999, and fully implement the system in a Y2K production mode by July 11, 1999.
The Agreement covers a single credit card processing platform at the
Nashville (Tennessee) Data Center of First Data Merchant Services, a
subsidiary of the corporation. Within 15 days, First Data will submit
to the agencies and its financial institution clients a written report
of how it will fulfill the agreement and then update progress regularly.
On this system, which is known as the Envoy processing system, First
Data services more than 200 banks, thrifts and credit unions.
First Data committed to the federal agencies that it will have ample
time to make the necessary adjustments to the Envoy system and to carry
out appropriate testing. The Agreement covers only the Envoy system,
which, according to First Data, represents approximately 2 percent of
its entire Y2K remediation effort. An on-site examination by an interagency
team of examiners found that the Envoy system was lagging in meeting
testing and implementation milestones, which are part of the interagency
This is the second time regulators have taken action against a service provider.
The agencies will continue to monitor financial institutions and service
providers for compliance with Year 2000 guidelines. A copy of the Agreement
between the agencies and First Data is attached.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 10,623 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.
FDIC press releases and other information are available on the Internet via the World Wide Web at www.fdic.gov
and may also be obtained through the FDIC's Public Information Center (800-276-6003 or (703) 562-2200).