Magazine article American Banker

Ludwig Says Banks Lagging on the Year-2000 Problem

Magazine article American Banker

Ludwig Says Banks Lagging on the Year-2000 Problem

Article excerpt

Comptroller of the Currency Eugene A. Ludwig told Congress on Tuesday that banks are not doing enough to fix year-2000 computer problems.

"Some national banks and some vendors need to speed up their efforts in order to complete their year-2000 preparations in a timely manner," Mr. Ludwig told the House Banking Committee.

One-third of community banks are either unaware of the problem or just starting to deal with it, he warned.

The hearing was the latest in a series held by Congress this year to hold regulators and bankers' feet to the fire. Regulators, bankers, and consultants agreed the industry needs to do more.

"Smaller banks, especially those relying heavily on external service providers, have been slower to recognize and respond to the year-2000 issue," said James R. Devlin, vice president and director of the year-2000 enterprise program office for Citibank N.A. "To the extent that their service providers don't have active year-2000 programs, these banks may be at risk."

Gartner Group research director Lou Marcoccio said larger banks cannot rest on their laurels.

"Large banks have made progress during the past year, but are advancing at a slower pace than large insurance companies or large financial investment companies," he said.

Lawmakers vowed to introduce legislation to protect banks and their customers.

Sen. Robert F. Bennett, chairman of the Senate Banking subcommittee on technology, said he would propose requiring publicly traded companies to inform investors of anticipated costs of year-2000 lawsuits.

"It is essential in my opinion that Congress act and act very quickly," the Utah Republican told the House committee.

To protect thrifts, House Banking Committee Chairman Jim Leach plans to introduce shortly a bill authorizing the Office of Thrift Supervision to examine outside vendors. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.