The FFIEC has issued the attached statement on the substantial risks to financial institutions involving their computer systems as the industry enters the new century (year 2000). These risks are attributed to the programming code in many existing computer systems that may result in inaccurate calculations based on any two-digit year field containing the value "00" which the system may read as 1900.
The FFIEC statement alerts financial institutions, servicers, and vendors to the need to adequately address the risks, including system failures or erroneous data, associated with the existing programming code. This issue potentially affects all organizations that rely upon computer systems.
Management should take action to ensure the credit union's computer system (hardware and software) is capable of handling the transitions into the twenty-first century correctly. We encourage you to use the attached statement as guidance for developing a plan of action. Credit unions which use outside electronic data processing vendors and servicers should seek assurance that their vendors and servicers are adequately addressing the system and software issues related to the coming millennium.
If you have any questions, please contact your regional office or your state supervisory authority.
Norman E. D'Amours