Regulators Criticized for Withholding Bank Y2K Ratings from Public
==========================================================
WILLIAMSBURG, Va., June 4 /PRNewswire/ -- Banking regulators are doing a grave disservice to millions of Americans by refusing to release the results of their Y2K examination of banks and thrift institutions, according to Richard Torrenzano, chairman and chief executive officer of New York City-based corporate communications and crisis counseling firm, The Torrenzano Group, Ltd.
In remarks made at the Conference of State Bank Supervisors Annual Meeting today, Torrenzano, a former member of the management committee and chief spokesperson at the New York Stock Exchange, criticized regulators for refusing to make public its examinations of bank Y2K readiness. The conference, held in Williamsburg, Virginia, was attended by more than 500 top bank executives and regulators.
''Only 3.2 percent of the more than 10,000 insured banks were rated 'Needs Improvement' or 'Unsatisfactory,''' said Torrenzano. ''And that's great -- unless your money is in a bank that falls in that 3.2 percent.
''As a depositor, I want to know whether or not my bank has been rated satisfactory and I want to know now,'' said Torrenzano.
''The money I have in the bank is there because I don't want to gamble with it, even though the odds are 97 to 3 in my favor. And shareholders also have the right to know how their banks have been rated. They are the owners of the bank. They have invested in these bank stocks with the expectation that sound management practices will result in continued dividends and increased stock value. I wouldn't exactly call getting a sub-par Y2K rating sound management. If this is the case, the owners must be told,'' he said.
Torrenzano noted that the Federal Deposit Insurance Corporation (FDIC) allows banks to publish their Community Reinvestment Act ratings and the agency also should allow banks to disclose their Y2K ratings. He called on regulators to issue a ''Seal of Approval'' to banks rated ''Satisfactory'' for their Y2K preparations.
Torrenzano did give credit to regulators and banks across the nation for the amount of information generally disseminated on Y2K, but said the public will not be confident of their readiness without the credibility established by a ''Seal of Approval.''
He cited a recent study by Wirthlin Worldwide, a respected public opinion research firm, that noted public skepticism on the Y2K readiness of banks. According to the study, three-quarters of respondents said they feel there will be some or a lot of
financial records mixed up as a result of the Y2K problem. Forty-two percent said they will withdraw extra money from their bank accounts and 11 percent said they will close out their bank accounts.
Torrenzano challenged the regulators in the room to take a leadership role in communicating the Y2K message and not to dump the problem of reassuring the public entirely in the laps of the banks.
''The ''Seal of Approval doesn't have to be a guarantee, just a public statement that gives reasonable assurance that the proper steps were taken by a particular bank on Y2K,'' he said.
Regardless of whether the banks are prepared operationally for Y2K, they still have much to do, Torrenzano told the conference. He encouraged the bankers to continue communicating to their customers, stockholders and other constituents about the steps taken to prepare their computer systems for the new millennium. He also urged the
audience to prepare in advance for everything that could go wrong, what he described as the ''what ifs.'' He said that customers must be assured that no matter what happens, banks have contingency plans in place to address Y2K problems.
The Torrenzano Group is a strategic communications firm specializing in building, enhancing and protecting corporate reputations. The firm provides strategic communications, investor relations, corporate repositioning and crisis management to corporations and institutions facing significant change or challenge.
biz.yahoo.com
==========================================================
US Banks Beating Y2K Bug But Some Need Backup-FDIC
WASHINGTON (Reuters) - Only a few U.S. banks are lagging in their Year 2000
preparations, but those that are need to keep accessible backup copies of key
customer data, the Federal Deposit Insurance Corporation said Thursday.
Just 205 of the 10,400 banks insured by the FDIC are now rated less than satisfactory
in regard to their Y2K compliance, down from 357 at the end of March, the agency
said ...
Nonetheless, the agency said that ''out of an overabundance of caution,'' it wanted all
institutions that did not achieve a satisfactory Y2K rating by July 31 to keep computer
copies of key deposit and loan information in a standardized format.
Banks routinely keep backup copies of the data stored in their computer systems but
often record different information and in different ways. The FDIC interim rule, which
would come into effect after a 30-day comment period, sets out what information
should be backed up and how it should be stored.
''We want to at least have core information on hand packaged in a way that we can use, so that if we need to get customers their money right away we can do it,'' an FDIC spokesman said.
The information would include items like account status, branch, account and tax identification numbers, customer names and addresses, account balances and accrued interest, he said.
The additional measures would not be particularly burdensome or expensive for the small number of banks that might be affected, the spokesman said. The FDIC estimates the cost of compliance at around $17,500 per bank.
dailynews.yahoo.com
Cheryl
|
