federal register
66699
Monday
November 29, 1999
Part II
Department of the Treasury
Office of the Comptroller of the Currency
Federal Reserve System
Federal Deposit Insurance Corporation
Department of the Treasury
Office of Thrift Supervision
12 CFR Part 30, et al.
Interagency Guidelines Establishing Year 2000
Standards for Safety and Soundness; Final Rule
Safety and Soundness Standards; Final Rule
VerDate 29-OCT-99 15:33 Nov 26, 1999 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\29NOR2.XXX pfrm01 PsN: 29NOR2
66699
Monday
November 29, 1999
Part II
Department of the Treasury
Office of the Comptroller of the Currency
Federal Reserve System
Federal Deposit Insurance Corporation
Department of the Treasury
Office of Thrift Supervision
12 CFR Part 30, et al.
Interagency Guidelines Establishing Year 2000
Standards for Safety and Soundness; Final Rule
Safety and Soundness Standards; Final Rule
VerDate 29-OCT-99 15:33 Nov 26, 1999 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\29NOR2.XXX pfrm01 PsN: 29NOR2
66700 Federal Register / Vol. 64, No. 228 / Monday, November 29, 1999 / Rules and Regulations
1 Standards issued under section 39 may take the
form of regulations or guidelines. If an agency
determines that an insured depository institution
fails to meet any standard established by regulation,
then, by the terms of the statute, the agency must
require the institution to submit an acceptable plan
to achieve compliance with the standard. If an
agency determines that an insured depository
institution fails to meet any standard established by
guideline, the agency may require the institution to
submit an acceptable compliance plan.
2 Additional Questions and Answers Concerning
Year 2000 Business Resumption Contingency
Planning (May 6, 1999); Year 2000 Customer
Communication Outline (February 17, 1999);
Questions and Answers Concerning Year 2000
Contingency Planning (December 11, 1998);
Guidance Concerning Fiduciary Services and Year
2000 Readiness (September 2, 1998); Questions and
Answers Concerning FFIEC Year 2000 Policy
(August 31, 1998); Guidance Concerning
Contingency Planning in Connection with Year
2000 Readiness (May 13, 1998); Guidance on Year
2000 Customer Awareness Programs (May 13,
1998); Guidance Concerning Testing for Year 2000
Readiness (April 10, 1998); Guidance Concerning
the Year 2000 Impact on Customers (March 17,
1998); Guidance Concerning Institution Due
Diligence in Connection with Service Provider and
Software Vendor Year 2000 Readiness (March 17,
1998); Safety and Soundness Guidelines
Concerning the Year 2000 Business Risk (December
17, 1997); Year 2000 Project Management
Awareness (May 5, 1997); and The Effect of Year
2000 on Computer Systems (June 1996)
[collectively, the FFIEC guidance].
3 The standards in the Guidelines are described in
mandatory terms in order to clarify the specific
actions insured depository institutions are expected
to take to achieve Year 2000 readiness.
Nevertheless, as explained in the following, an
Agency will decide whether to require corrective
action under section 39 for an institution’s
noncompliance with these standards based on the
circumstances of the particular case.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 30
[Docket No. 99–16]
RIN 1557–AB67
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Docket No. R–1017]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 364
RIN 3064–AC18
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 570
[Docket No. 99–35]
RIN 1550–AB27
Interagency Guidelines Establishing
Year 2000 Standards for Safety and
Soundness
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; and Office of Thrift
Supervision, Treasury.
ACTION: Final uniform guidelines.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the Agencies) are adopting
in final form the interim guidelines
establishing Year 2000 safety and
soundness standards for insured
depository institutions published by the
Agencies on October 15, 1998, and in
effect since that date. This issuance of
final guidelines (Guidelines), pursuant
to section 39 of the Federal Deposit
Insurance Act (FDI Act), is a technical
action of the Agencies, which remain
confident that, based on their reviews,
insured depository institutions are
appropriately preparing for the Year
2000.
EFFECTIVE DATE: The final Guidelines are
effective November 29, 1999.
FOR FURTHER INFORMATION CONTACT:
OCC: Mark L. O’Dell, Director, Year
2000 Bank Supervision Policy (202)
874–2340; Brian McCormally, Assistant
Director, Enforcement and Compliance
(202) 874–4800; Karl Betz, Attorney,
Legislative and Regulatory Activities
(202) 874–5090; or Stuart E. Feldstein,
Assistant Director, Legislative and
Regulatory Activities (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219.
Board of Governors: Angela Desmond,
Special Counsel, Division of Banking
Supervision and Regulation (202) 452–
3497; or Nancy Oakes, Counsel,
Division of Banking Supervision and
Regulation (202) 452–2743. For the
hearing impaired only,
Telecommunication Device for Deaf
(TDD), Diane Jenkins (202) 452–3544,
Board of Governors of the Federal
Reserve System, 20th and C Streets,
NW, Washington DC 20551.
FDIC: Frank Hartigan, Year 2000
Project Manager, Division of
Supervision (202) 898–6867; Sandy
Comenetz, Year 2000 Project Manager,
Legal Division (202) 898–3582; Richard
Bogue, Counsel, Legal Division (202)
898–3726; or Nancy Chase Burton,
Counsel, Legal Division (202) 898–6533,
Federal Deposit Insurance Corporation,
550 17th Street, NW, Washington, DC
20429.
OTS: Dorothy Van Cleave, National
Year 2000 Coordinator (202) 906–7380;
Stephen E. Hart, Assistant Chief
Counsel, Office of Enforcement, Office
of Chief Counsel (202) 906–7204; or
Timothy P. Leary, Counsel (Banking &
Finance), Regulations and Legislation
Division, Office of Chief Counsel (202)
906–7170, Office of Thrift Supervision,
1700 G Street, NW, Washington, DC
20552.
SUPPLEMENTARY INFORMATION:
Background
The Agencies today are issuing
Guidelines establishing Year 2000
standards for safety and soundness
pursuant to section 39 of the FDI Act.
12 U.S.C. 1831p–1. Section 39 requires
the Agencies to establish operational
and managerial standards either in the
form of a regulation or guidelines for
insured depository institutions relating
to, among other things, internal
controls, information systems, and
internal audit systems. Section 39 also
authorizes the Agencies to prescribe
operational and managerial standards as
they determine to be appropriate, and to
require institutions that fail to meet
such standards to submit corrective
action plans.1
On October 15, 1998, the Agencies
requested comment on joint interim
guidelines establishing Year 2000
standards for safety and soundness. 63
FR 55480. After careful review of the
comments received, the Agencies adopt
the interim guidelines with only minor
technical changes, discussed in the
following.
The Guidelines are distilled from—
and are intended to be consistent with—
key principles contained in several
FFIEC guidance papers 2 on important
aspects of Year 2000 readiness. Among
other things, the Guidelines describe
certain essential steps that insured
depository institutions must take at the
awareness, assessment, renovation,
validation (testing), and implementation
phases of their efforts to achieve Year
2000 readiness. The Guidelines, for
instance, establish standards for
management and boards of directors in
developing and managing Year 2000
project plans, validating remediation
efforts, and planning for contingencies.
The Guidelines do not replace or
supplant the FFIEC guidance, which
will continue to apply to all entities
regulated or examined by the Agencies.
Insured depository institutions also
should refer to the FFIEC guidance.3
The Agencies will use the existing
rules regarding safety and soundness
standards to require submission of
VerDate 29-OCT-99 14:38 Nov 26, 1999 Jkt 190000 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\29NOR2.XXX pfrm04 PsN: 29NOR2
1 Standards issued under section 39 may take the
form of regulations or guidelines. If an agency
determines that an insured depository institution
fails to meet any standard established by regulation,
then, by the terms of the statute, the agency must
require the institution to submit an acceptable plan
to achieve compliance with the standard. If an
agency determines that an insured depository
institution fails to meet any standard established by
guideline, the agency may require the institution to
submit an acceptable compliance plan.
2 Additional Questions and Answers Concerning
Year 2000 Business Resumption Contingency
Planning (May 6, 1999); Year 2000 Customer
Communication Outline (February 17, 1999);
Questions and Answers Concerning Year 2000
Contingency Planning (December 11, 1998);
Guidance Concerning Fiduciary Services and Year
2000 Readiness (September 2, 1998); Questions and
Answers Concerning FFIEC Year 2000 Policy
(August 31, 1998); Guidance Concerning
Contingency Planning in Connection with Year
2000 Readiness (May 13, 1998); Guidance on Year
2000 Customer Awareness Programs (May 13,
1998); Guidance Concerning Testing for Year 2000
Readiness (April 10, 1998); Guidance Concerning
the Year 2000 Impact on Customers (March 17,
1998); Guidance Concerning Institution Due
Diligence in Connection with Service Provider and
Software Vendor Year 2000 Readiness (March 17,
1998); Safety and Soundness Guidelines
Concerning the Year 2000 Business Risk (December
17, 1997); Year 2000 Project Management
Awareness (May 5, 1997); and The Effect of Year
2000 on Computer Systems (June 1996)
[collectively, the FFIEC guidance].
3 The standards in the Guidelines are described in
mandatory terms in order to clarify the specific
actions insured depository institutions are expected
to take to achieve Year 2000 readiness.
Nevertheless, as explained in the following, an
Agency will decide whether to require corrective
action under section 39 for an institution’s
noncompliance with these standards based on the
circumstances of the particular case.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 30
[Docket No. 99–16]
RIN 1557–AB67
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Docket No. R–1017]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 364
RIN 3064–AC18
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 570
[Docket No. 99–35]
RIN 1550–AB27
Interagency Guidelines Establishing
Year 2000 Standards for Safety and
Soundness
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; and Office of Thrift
Supervision, Treasury.
ACTION: Final uniform guidelines.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the Agencies) are adopting
in final form the interim guidelines
establishing Year 2000 safety and
soundness standards for insured
depository institutions published by the
Agencies on October 15, 1998, and in
effect since that date. This issuance of
final guidelines (Guidelines), pursuant
to section 39 of the Federal Deposit
Insurance Act (FDI Act), is a technical
action of the Agencies, which remain
confident that, based on their reviews,
insured depository institutions are
appropriately preparing for the Year
2000.
EFFECTIVE DATE: The final Guidelines are
effective November 29, 1999.
FOR FURTHER INFORMATION CONTACT:
OCC: Mark L. O’Dell, Director, Year
2000 Bank Supervision Policy (202)
874–2340; Brian McCormally, Assistant
Director, Enforcement and Compliance
(202) 874–4800; Karl Betz, Attorney,
Legislative and Regulatory Activities
(202) 874–5090; or Stuart E. Feldstein,
Assistant Director, Legislative and
Regulatory Activities (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219.
Board of Governors: Angela Desmond,
Special Counsel, Division of Banking
Supervision and Regulation (202) 452–
3497; or Nancy Oakes, Counsel,
Division of Banking Supervision and
Regulation (202) 452–2743. For the
hearing impaired only,
Telecommunication Device for Deaf
(TDD), Diane Jenkins (202) 452–3544,
Board of Governors of the Federal
Reserve System, 20th and C Streets,
NW, Washington DC 20551.
FDIC: Frank Hartigan, Year 2000
Project Manager, Division of
Supervision (202) 898–6867; Sandy
Comenetz, Year 2000 Project Manager,
Legal Division (202) 898–3582; Richard
Bogue, Counsel, Legal Division (202)
898–3726; or Nancy Chase Burton,
Counsel, Legal Division (202) 898–6533,
Federal Deposit Insurance Corporation,
550 17th Street, NW, Washington, DC
20429.
OTS: Dorothy Van Cleave, National
Year 2000 Coordinator (202) 906–7380;
Stephen E. Hart, Assistant Chief
Counsel, Office of Enforcement, Office
of Chief Counsel (202) 906–7204; or
Timothy P. Leary, Counsel (Banking &
Finance), Regulations and Legislation
Division, Office of Chief Counsel (202)
906–7170, Office of Thrift Supervision,
1700 G Street, NW, Washington, DC
20552.
SUPPLEMENTARY INFORMATION:
Background
The Agencies today are issuing
Guidelines establishing Year 2000
standards for safety and soundness
pursuant to section 39 of the FDI Act.
12 U.S.C. 1831p–1. Section 39 requires
the Agencies to establish operational
and managerial standards either in the
form of a regulation or guidelines for
insured depository institutions relating
to, among other things, internal
controls, information systems, and
internal audit systems. Section 39 also
authorizes the Agencies to prescribe
operational and managerial standards as
they determine to be appropriate, and to
require institutions that fail to meet
such standards to submit corrective
action plans.1
On October 15, 1998, the Agencies
requested comment on joint interim
guidelines establishing Year 2000
standards for safety and soundness. 63
FR 55480. After careful review of the
comments received, the Agencies adopt
the interim guidelines with only minor
technical changes, discussed in the
following.
The Guidelines are distilled from—
and are intended to be consistent with—
key principles contained in several
FFIEC guidance papers 2 on important
aspects of Year 2000 readiness. Among
other things, the Guidelines describe
certain essential steps that insured
depository institutions must take at the
awareness, assessment, renovation,
validation (testing), and implementation
phases of their efforts to achieve Year
2000 readiness. The Guidelines, for
instance, establish standards for
management and boards of directors in
developing and managing Year 2000
project plans, validating remediation
efforts, and planning for contingencies.
The Guidelines do not replace or
supplant the FFIEC guidance, which
will continue to apply to all entities
regulated or examined by the Agencies.
Insured depository institutions also
should refer to the FFIEC guidance.3
The Agencies will use the existing
rules regarding safety and soundness
standards to require submission of
VerDate 29-OCT-99 14:38 Nov 26, 1999 Jkt 190000 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\29NOR2.XXX pfrm04 PsN: 29NOR2