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l l★K Federal Reserve Bank of Dallas DALLAS, TEXAS 75265-5906 November 19, 1999 Notice 99-100 TO: The Chief Executive Officer of each financial institution, bank holding company, and others concerned in the Eleventh Federal Reserve District SUBJECT Year 2000-Related Oversight of Service Provider and Software Vendor Organizations DETAILS The Federal Financial Institutions Examination Council (FFIEC) has issued a letter outlining the scope of FFIEC agency oversight of service providers and software vendors for the fourth quarter and during the century date change rollover period. During the fourth quarter, the FFIEC agencies, through a combination of site visits and telephone contacts, will review the efforts of service providers and software vendors to address business contingency planning, change management procedures and conversion, deficiencies noted during previous Y2K agency assessments, and event management planning. During the rollover period, FFIEC agency examiners will be on site at selected service providers and software vendors. The agencies also will gather information on the remaining organizations throughout the same period. The FFIEC letter instructs the organizations to contact their primary FFIEC examining agency for further information. ATTACHMENT A copy of the FFIEC’s letter dated October 15, 1999, is attached. MORE INFORMATION For more information, please contact Ann Worthy, (214) 922-6156, in the Banking Supervision Department. For additional copies of this Bank’s notice, contact the Public Affairs Department at (214) 922-5254. For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. Federal Financial Institutions Examination Council 2000 K Street, NW, Suite 310. Washington, DC 20006, (202) 872-7500, FAX (202) 872-7501 October 15, 1999 To: The Boards of Directors and Chief Executive Officers of companies that provide computer services and software to insured financial institutions, all federally supervised financial institutions, senior management of each FFIEC agency, and all examining personnel. The Federal Financial Institutions Examination Council (FFIEC) agencies place a high degree of importance on the Year 2000 readiness efforts of the financial industry. Because of the importance of service providers and software vendors to the financial services industry, in 1998 the FFIEC agencies augmented the reviews of these organizations to include quarterly analyses of their Year 2000 readiness. We are now in the final months of our Year 2000 supervisory program and our efforts will focus on the continued Year 2000 readiness of both financial institutions and their service providers and software vendors. This letter outlines the scope of our activities for the fourth quarter and during the century date change rollover period relating to service providers and software vendors. Fourth Quarter Reviews During the remainder of 1999, a combination of on-site visits and telephone contacts will be used depending upon the risk profile of the service provider or software vendor. During these contacts, examiners will review: • • • • • Business resumption contingency planning efforts; Clean management procedures and conversion efforts; Year 2000-related operating problems; Deficiencies noted during previous Y2K assessments; and Event planning efforts. Century Date Change Rollover Period The FFIEC agencies plan to monitor operating performance of service providers and software vendors closely from late December 1999 throughout the first week of January 2000. FFIEC agency examiners will be on-site at selected service providers and software vendors during this period. These entities will be notified that an examiner plans to be on-site. All other institutions and companies will be contacted via telephone during the rollover period by a representative of the primary examining agency. Efforts during this period will focus on ensuring that mission-critical systems are operating effectively. Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller, Office of Thrift Supervision. Examination staff will be gathering information on companies’ performance throughout the rollover period. This information will help the FFIEC agencies monitor and report on the status of the nation’s financial institution industry, quickly identify problems, and take appropriate corrective action where needed. To facilitate the gathering of information, representatives of the appropriate FFIEC agency will contact you to determine the name, location, and telephone number of the individual or individuals to contact during the rollover period. The FFIEC agencies will be working together to coordinate our monitoring efforts. Each FFIEC member agency will notify the service providers and software vendors it examines of the specific information to be collected. During the century date change period, management of service providers and software vendors should promptly notify the primary examining agency of any operating problems encountered. We also expect prompt and forthright communications between service providers and software vendors and their clients during this period. For further information, please contact your primary examining agency’s supervisory office.