Magazine article American Banker

Tougher Year-2000 Scrutiny Expected Next Year

Magazine article American Banker

Tougher Year-2000 Scrutiny Expected Next Year

Article excerpt

Financial executives foresee a harder time getting regulators to sign off on their year-2000 preparedness as the fateful year comes near.

Ninety-three percent of banks, thrifts, and credit unions passed the first wave of tests conducted by the Federal Financial Institutions Examination Council and completed in June.

The other 7% needed improvement, but fewer than 50 institutions were rated "unsatisfactory."

But regulators will be demanding more from financial institutions, said David Kominiak, senior information technology examiner for the Federal Reserve Bank of Chicago.

"We expect to intensify our effort in the coming year," said Frank Hartigan, the Federal Deposit Insurance Corp.'s year-2000 program manager.

Some banks are preparing for stricter reviews.

Merger partners Banc One Corp. and First Chicago NBD Corp. are still rated "satisfactory," said Verne Istock, First Chicago's chairman and chief executive officer, in a recent speech. But "don't be surprised if regulators start giving everyone in the industry a 'needs improvement' rating," he added.

First Chicago spokesman Thomas Kelly said Mr. Istock had "addressed the issue to ensure our people remain focused on continuing to meet our milestones."

"We are on target for meeting our year-2000 goal," Mr. Kelly said. First Chicago NBD will finish remediating and testing its internal systems this year and will test its outside interfaces in 1999, he said.

Regulators declined to discuss First Chicago or Mr. …

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