Examination Parity and Year 2000 Readiness for Financial Institutions Act
PL 105-164 (H.R.3116), enacted 03/20/1998

112 STAT. 32 
PUBLIC LAW 105-164—MAR. 20, 1998 
Public Law 105-164 
105th Congress 
An Act 
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"^^ address the Year 2000 computer problems with regard to financial institutions, 
:— 
to extend examination parity to the Director of the Office of Thrift Supervision 
[H.R. 3116] 
and the National Credit Union Administration, and for other purposes. 
Be it enacted by the Senate and House of Representatives 
of 
Examination 
the United States of America in Congress assembled. 
Parity and Year 
2000 Readiness 
SECTION 1. SHORT TITLE. 
Institutions Act. 
This Act may be cited as the "Examination Parity and Year 
12 use 1461 
2000 Readiness for Financial Institutions Act". 
note. 
12 use 1811 
SEC. 2. YEAR 2000 READINESS FOR FINANCIAL INSTITUTIONS. 
°°*®- 
(a) FINDINGS.—The Congress fmds that— 
(1) the Year 2000 computer problem poses a serious chal-
lenge to the American economy, including the Nation's banking 
and financial services industries; 
(2) thousands of banks, savings associations, and credit 
unions rely heavily on internal information technology and 
computer systems, as well as outside service providers, for 
mission-critical functions, such as check clearing, direct deposit, 
accounting, automated teller machine networks, credit card 
processing, and data exchanges with domestic and international 
borrowers, customers, and other financial institutions; and 
(3) Federal financial regulatory agencies must have suffi-
cient examination authority to ensure that the safety and 
soundness of the Nation's financial institutions will not be 
at risk. 
(b) DEFINITIONS.—For purposes of this section— 
(1) the terms "depository institution" and "Federal banking 
agency" have the same meanings as in section 3 of the Federal 
Deposit Insurance Act; 
(2) the term "Federal home loan bank" has the same mean-
ing as in section 2 of the Federal Home Loan Bank Act; 
(3) the term "Federal reserve bank" means a reserve bank 
established under the Federal Reserve Act; 
(4) the term "insured credit union" has the same meaning 
as in section 101 of the Federal Credit Union Act; and 
(5) the term "Year 2000 computer problem" means, with 
respect to information technology, any problem which prevents 
such 
technology 
from 
accurately 
processing, 
calculating, 
comparing, or sequencing date or time data— 
(A) from, into, or between— 
(i) the 20th and 21st centuries; or 
(ii) the years 1999 and 2000; or 
(B) with regard to leap year calculations. 
PUBLIC LAW 105-164—MAR. 20, 1998 
112 STAT. $3 
(c) SEMINARS AND MODEL APPROACHES TO YEAR 2000 COMPUTER 
PROBLEM.— 
(1) SEMINARS.— 
(A) IN GENERAL.—Each Federal banking agency and 
the National Credit Union Administration Board shall offer 
seminars to all depository institutions and insured credit 
unions under the jurisdiction of such agency on the implica-
tion of the Year 2000 computer problem for— 
(i) the safe and sound operations of such depository 
institutions and credit unions; and 
(ii) transactions with other financial institutions, 
including Federal reserve banks and Federal home 
loan banks. ,. 
(B) CONTENT AND SCHEDULE.—^The content and sched-
ule of seminars offered pursuant to subparagraph (A) shall 
be determined by each Federal banking agency and the 
National Credit Union Administration Board taking into 
account the resources and examination priorities of such 
agency. 
(2) MODEL APPROACHES.— 
(A) IN GENERAL.—Each Federal banking agency and 
the National Credit Union Administration Board shall 
make available to each depository institution and insured 
credit union under the jurisdiction of such agency model 
approaches to common Year 2000 computer problems, such 
as model approaches with regard to project management, 
vendor contracts, testing regimes, and business continuity 
planning. 
(B) VARIETY OF APPROACHES.—In developing model 
approaches to the Year 2000 computer problem pursuant 
to subparagraph (A), each Federal banking agency and 
the National Credit Union Administration Board shall take 
into account the need to develop a variety of approaches 
to correspond to the variety of depository institutions or 
credit unions within the jurisdiction of the agency. 
(3) COOPERATION.—In carrying out this section, the Federal 
banking agencies and the National Credit Union Administra-
tion Board may cooperate and coordinate their activities with 
each other, the Financial Institutions Examination Council, 
and appropriate organizations representing depository institu-
tions and credit unions. 
SEC. 3. REGULATION AND EXAMINATION OF SERVICE PROVIDERS. 
(a) REGULATION AND EXAMINATION OF SAVINGS ASSOCIATION 
SERVICE COMPANIES.— 
(1) AMENDMENT TO HOME OWNERS' LOAN ACT.—Section 5(d) 
of the Home Owners' Loan Act (12 U.S.C. 1464(d)) is amended 
by adding at the end the following: 
"(7) 
REGULATION 
AND 
EXAMINATION 
OF 
SAVINGS 
ASSOCIATION SERVICE COMPANIES, SUBSIDIARIES, AND SERVICE 
PROVIDERS.— 
"(A) 
GENERAL 
EXAMINATION 
AND 
REGULATORY 
AUTHORITY.—A service company or subsidiary that is owned 
in whole or in part by a savings association shall be subject 
to examination and regulation by the Director to the same 
extent as that savings association. 
112 STAT. 34 
PUBLIC LAW 105-164—MAR. 20, 1998 
"(B) EXAMINATION BY OTHER BANKING AGENCIES.—^The 
Director may authorize any other Federal banking agency 
that supervises any other owner of part of the service 
company or subsidiary to perform an examination described 
in subparagraph (A). 
"(C) 
APPLICABILITY OF SECTION 8 OF THE FEDERAL 
DEPOSIT INSURANCE ACT.—^A Service company or subsidiary 
that is owned in whole or in part by a saving association 
shall be subject to the provisions of section 8 of the Federal 
Deposit Insurance Act as if the service company or subsidi-
ary were an insured depository institution. In any such 
case, the Director shall be deemed to be the appropriate 
Federal banking agency, pursuant to section 3(q) of the 
Federal Deposit Insurance Act. 
"(D) 
SERVICE PERFORMED BY CONTRACT OR OTHER-
WISE.—^NotwithstEinding subparagraph (A), if a savings 
association, a subsidiary thereof, or any savings and loan 
affiliate or entity, as identified by section 8(b)(9) of the 
Federal Deposit Insurance Act, that is regularly examined 
or subject to examination by the Director, causes to be 
performed for itself, by contract or otherwise, any service 
authorized under this Act or, in the case of a State savings 
association, any applicable State law, whether on or off 
its premises— 
"(i) such performance shall be subject to regulation 
and examination by the Director to the same extent 
as if such services were being performed by the savings 
association on its own premises; and 
"(ii) the savings association shall notify 
the 
Director of the existence of the service relationship 
not later than 30 days after the earlier of— 
"(I) the date on which the contract is entered 
into; or 
"(II) the date on which the performance of 
the service is initiated. 
"(E) ADMINISTRATION BY THE DIRECTOR.—^The Director 
may issue such regulations and orders, including those 
issued pursuant to section 8 of the Federal Deposit Insur-
ance Act, as may be necessary to enable the Director to 
administer and carry out this paragraph and to prevent 
evasion of this paragraph. 
"(8) DEFINITIONS.—For purposes of this section— 
"(A) the term 'service company' means— 
"(i) any corporation— 
"(I) that is organized to perform services 
authorized by this Act or, in the case of a corpora-
tion owned in part by a State savings association, 
authorized by applicable State law; and 
"(II) all of the capital stock of which is owned 
by 1 or more insured savings associations; and 
"(ii) any limited liability company— 
"(I) that is organized to perform services 
authorized by this Act or, in the case of a company, 
1 of the members of which is a State savings 
association, authorized by applicable State law; 
and 
PUBLIC LAW 105-164—MAR. 20, 1998 
112 STAT. 35 
"(11) all of the members of which are 1 or 
more insured savings associations; 
"(B) the term 'limited liability company' means any 
company, partnership, trust, or similar business entity 
organized under the law of a State (as defined in section 
3 of the Federal Deposit Insurance Act) that provides that 
a member or manager of such company is not personally 
liable for a debt, obligation, or liability of the company 
solely by reason of being, or acting as, a member or man-
ager of such company; and 
"(C) the terms 'State savings association' and 'subsidi-
ary' have the same meanings as in section 3 of the Federal 
Deposit Insurance Act.". 
(2) 
CONFORMING AMENDMENTS TO SECTION 8 OF THE 
FEDERAL DEPOSIT INSURANCE ACT.—Section 8 of the Federal 
Deposit Insurance Act (12 U.S.C. 1818) is amended— 
(A) in subsection (b)(9), by striking "to any service 
corporation of a savings association and to any subsidiary 
of such service corporation"; 
(B) in subsection (e)(7)(A)(ii), by striking "(b)(8)" and 
inserting "(b)(9)"; and 
(C) in subsection (j)(2), by striking "(b)(8)" and inserting 
"(b)(9)". 
(b) REGULATION AND EXAMINATION OF SERVICE PROVIDERS FOR 
CREDIT UNIONS.—^Title II of the Federal Credit Union Act (12 
U.S.C. 1781 et seq.) is amended by inserting after section 206 
the following new section: 
"SEC. 206A. REGULATION AND EXAMINATION OF CREDIT UNION 
12 USC 1786A. 
ORGANIZATIONS AND SERVICE PROVIDERS. 
"(a) 
REGULATION 
AND 
EXAMINATION 
OF 
CREDIT 
UNION 
ORGANIZATIONS.— 
"(1) GENERAL EXAMINATION AND REGULATORY AUTHORITY.— 
A credit union organization shall be subject to examination 
and regulation by the Board to the same extent as that insured 
credit union. 
"(2) 
EXAMINATION BY OTHER BANKING AGENCIES.—^The 
Board may authorize to make an examination of a credit union 
organization in accordance with paragraph (1)— 
"(A) any Federal regulator agency that supervises any 
activity of a credit union organization; or 
"(B) any Federal banking agency that supervises any 
other person who maintains an ownership interest in a 
credit union organization. 
"(b) APPLICABILITY OF SECTION 206.—A credit union organiza-
tion shall be subject to the provisions of section 206 as if the 
credit union organization were an insured credit union. 
"(c) 
SERVICE PERFORMED BY CONTRACT OR OTHERWISE.— 
Notwithstanding subsection (a), if an insured credit union or a 
credit union organization that is regularly examined or subject 
to examination by the Board, causes to be performed for itself, 
by contract or otherwise, any service authorized under this Act, 
or in the case of a State credit union, any applicable State law, 
whether on or off its premises— 
"(1) such performance shall be subject to regulation and 
examination by the Board to the same extent as if such services 
112 STAT. 36 
PUBLIC LAW 105-164—MAR. 20, 1998 
were being performed by the insured credit union or credit 
union organization itself on its own premises; and 
"(2) the insured credit union or credit union organization 
shall notify the Board of the existence of the service relationship 
not later than 30 days after the earlier of— 
"(A) the date on which the contract is entered 
into; or 
"(B) the date on which the performance of the service 
is initiated. 
"(d) ADMINISTRATION BY THE BOARD.—^The Board may issue 
such regulations and orders as may be necessary to enable the 
Board to administer and carry out this section and to prevent 
evasion of this section. 
"(e) DEFINITIONS.—^For purposes of this section— 
"(1) the term 'credit union organization' means any entity 
that— 
"(A) is not a credit union; 
"(B) is an entity in which an insured credit union 
may lawfully hold an ownership interest or investment; 
and 
"(C) is owned in whole or in part by £in insured credit 
union; and 
"(2) the term 'Federal banking agency' has the same 
meaning as in section 3 of the Federal Deposit Insurance Act. 
"(f) EXPIRATION OF AUTHORITY.—^This section and all powers 
and authority of the Board under this section shall cease to be 
effective as of December 31, 2001.". 
Approved March 20, 1998. 
LEGISLATIVE HISTORY—H.R. 3116: 
HOUSE REPORTS: No. 105-417 (Comm. on Banking and Financial Services). 
CONGRESSIONAL RECORD, Vol. 144 (1998): 
Feb. 24, considered and passed House. 
Mar. 6, considered and passed Senate. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998): 
Mar. 20, Presidential statement.