Magazine article American Banker

Feds Say 99% of Institutions Are Up to Speed on Y2K Switch

Magazine article American Banker

Feds Say 99% of Institutions Are Up to Speed on Y2K Switch

Article excerpt


All but 89 banks and thrifts nationwide were well prepared at midyear for the year-2000 date change, regulators reported Monday.

Bank supervisors gave "satisfactory" ratings to 99.1% of the 10,335 federally insured institutions as of June 30. Only 78 banks and thrifts were rated "needs improvement." Just 11 received an "unsatisfactory" grade.

"That's an enviable record for any industry," said Federal Deposit Insurance Corp. Chairman Donna A. Tanoue in an interview.

The industry's performance was its best since regulators began issuing grades last year, and it reflected a marked improvement over results from the prior quarter.

As of March 31, 313 banks and thrifts were judged "needs improvement," and 24 were rated "unsatisfactory."

Ms. Tanoue credited the improvement to tight supervision of laggards and aggressive compliance efforts by banks. She also predicted that the proportion of "satisfactory" banks and thrifts would continue to grow as the year progresses.

As if on cue, the Federal Reserve Board on Monday ceased enforcement actions on two banking companies, Putnam-Greene Financial Corp. in Eatonston, Ga., and Community Capital Corp. of Greenwood, S.C.

Yet the 89 subpar institutions are under enforcement actions, FDIC officials said. And Ms. Tanoue warned that the agency could lower its ratings of some banks that were graded "needs improvement."

"We've emphasized a need to downgrade the institutions that haven't met the requisite milestones," she said. …

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