Advice to the Fed
Strategies for the New Millennium
Did You Know?
Informing Customers About the Year 2000
ducating consumers about the Year 2000 issue is critical to minimizing unwarranted public alarm. To help institutions educate their customers, the Federal Financial Institutions Examination Council (FFIEC), of which the Federal Reserve is a member, recently issued guidance to institutions for developing customer awareness programs on their Year 2000 readiness efforts. This guidance will help institutions prepare complete and accurate responses to customer questions and concerns.
|On the Year 2000
Personal Security and Cash Availability
We know we have enough currency to meet any conceivable demand. The concern I have is that people are going to draw too much out, and walking around with a lot of hundred dollar bills is not the safest means to keep your money.
||ALAN GREENSPAN, CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
COMMENTS BEFORE THE SENATE BANKING COMMITTEE ON FEB. 23, 1999
Ensuring Public Confidence
The key to public confidence increasingly is communication. Most, if not all, of the nation's banks, financial firms, utilities — you name it — have good, reassuring stories to tell. However, many firms have been heeding their lawyer's advice and saying nothing for fear that unavoidable problems may occur. A bit of legislative relief from the potential for litigation occurred last fall with the passage of the Year 2000 Information and Readiness Disclosure Act. Even with this help, the complexities of Y2K can make it hard for firms to speak clearly. But speak clearly they must, for now is the time to convey messages of confidence.
||CATHY E. MINEHAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, FEDERAL RESERVE BANK OF BOSTON
REMARKS TO THE BOSTON ECONOMIC CLUB, MARCH 17, 1999
For more information on the century date change, see the Federal Financial Institutions Examination Council's site on the World Wide Web at www.ffiec.gov/y2k/default.htm. This site has links to information about the century date change efforts of the five U.S. banking regulators.
Communicating with Customers
Each financial institution is unique, and therefore its response to customer inquiries about Y2K will be unique. As a result, the FFIEC encourages institutions to tell their own Y2K story by training front-line personnel to provide information and respond to inquiries, providing informational brochures or other written disclosures in statements, establishing toll-free hot lines for inquiries, holding educational seminars, and developing Y2K Web sites.
Suggested Elements of Year 2000 Customer Communications
- Explain the Year 2000 issue: Explain to customers the efforts to prepare for the century date change and other dates that may affect computer systems. Clearly describe the Year 2000 issue and how extensive it is, including, where appropriate, its effect on businesses and governments worldwide.
- Address customer expectations: Inform customers that maintaining their confidence in banking is a priority. Mention the resources the institution has devoted to addressing Year 2000 projects. Explain that the institution and federal and state regulators are working to ensure that service will not be disrupted in the rollover to the Year 2000. State that the institution will have contingency plans in place to ensure customers have access to their money and accurate account information in the event any problems occur. Emphasize that the Federal Deposit Insurance Corporation and National Credit Union Share Insurance Fund have issued notices reminding consumers that the Year 2000 date change will not affect deposit insurance coverage.
- Provide information on the institution's Year 2000 project plan: Describe the institution's comprehensive plan to address the Year 2000 challenge, including remediation efforts and testing of internal and external systems. Track the institution's progress and discuss the milestones put in place, especially those that reflect business priorities and customer needs. Consider discussing the status of mission-critical systems.
- Describe Year 2000 contingency plans: Provide information on any contingency plans to be used in the event of a disruption during the rollover to 2000. Describe how the plans will help the institution resume operations and continue to provide services in the event of a Year 2000 disruption.
Because of the effect of the Year 2000 Information and Readiness Disclosure Act of 1998, financial institutions may wish to consult with their legal counsel in designing their Year 2000 customer awareness programs. The act can be found on the Internet at www.y2k.gov/text/y2kinfo.html. The FFIEC's interagency statement on customer communications can be found at www.ffiec.gov/custcom.htm.