**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.

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.

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