Industry Letters

Year 2000 Survey

December 1, 1997


SUBJECT: YEAR 2000 Survey

The Banking Department is continuing to monitor the progress of financial service companies in addressing the Year 2000 problem. The Federal Financial Institutions Examination Council ("FFIEC") released an interagency advisory memorandum entitled Year 2000 Project Management Awareness (May 1997) which states that "for mission critical applications, the [banking regulators] strongly encourage the industry to assure that programming changes are largely completed and that testing be well underway by December 31, 1998."

In a September 25, 1996 letter to licensees and exempt organizations, the Banking Department requested that these organizations advise it of their plans to meet the EDP challenges. To provide further guidance and to heighten awareness of the need for financial institutions to attain substantial Year 2000 capability by year-end 1998, this letter requests that the Banking Department be apprised of the current status of your institution’s Year 2000 initiatives.

This letter also hereby advises that Year 2000 initiatives will be included in the Banking Department’s regular examinations of licensees. Moreover, after year-end 1998, the Banking Department will seek certification from the senior management of each licensee, exempt organization or servicer that all information technology systems are Year 2000 compliant. At that time, further review and discussion of all systems not certified as Year 2000 capable will be warranted.

In order for the Banking Department to evaluate your preparations for the year 2000, please answer the questions below. It is intended that responses should be brief, unless warranted by your institution’s situation.

In your reply, if you are a licensee or exempt organization, identify (by complete official title) all of your organization's affiliated entities which are supervised by the New York State Banking Department. Servicers, although the Banking Department may not directly supervise them, should identify all affiliated entities that service New York State residential mortgage loans.

  1. Is your organization’s data processing system presently capable and tested to process dates beyond the Year 2000? This includes hardware, software, and the support environment. An affirmative answer means that both your organization’s worldwide operations (branches, subsidiaries, and other affiliated entities), and third-party provided services and products, which affect your institution’s Year 2000 capability, are presently ready.
  2. The May 1997 FFIEC statement advises that "Mission critical applications should be identified and priorities set for Year 2000 work by the end of the third quarter of 1997." It is expected that such identification of affected systems and databases is already well underway. Has your organization completed this assessment phase of the project?
  3. The May 1997 FFIEC statement further advises that "Code enhancements and revisions, hardware upgrades, and other associated changes follow the assessment phase and should be largely completed by December 31, 1998." Does your organization presently have a program underway to ensure that its data processing system is ready and proven (tested) to be Year 2000 capable? Will the "renovation phase" of system upgrades be largely completed by the target date of end-year 1998? If not, inform us as to when your program commenced, and further, indicate your institution’s target dates.
  4. If your organization does not have a comprehensive program initiative underway to ensure Year 2000 readiness, explain. (For example, it is anticipated that the institution is merging or liquidating operations in New York State prior to January 1, 2000.)

Should you have any questions or require guidance concerning this matter, please contact John S. Nodalny (212-618-6681). Further, the FFIEC Interagency Statement is available on the FFIEC Internet web page at or may be obtained by toll free FAX. 888-882-0982.

Your response to the above survey should be forwarded by December 31, 1997, to:

New York State Banking Department
Mortgage Banking Division
Two Rector Street
New York, NY 10006
Attn. John S. Nodalny

The survey should be signed by the executive officer charged with overseeing your institution’s information technology division.

If, subsequent to your response to this letter, events change your situation significantly, please notify Mr. Nodalny immediately.

Thank you for your cooperation and prompt attention in this matter.

Very truly yours,

Elizabeth McCaul