Link <:)=

PALM BEACH GARDENS, FLA. (March 8) BUSINESS WIRE -March 8, 1998--

Findings Contradict Regulators' Tallies

In a new survey of Y2K preparedness, 247 of 1,128 banks and S&Ls reported completion dates that were deemed to be inadequate, according to Weiss Ratings Inc., a leading bank rating agency.

Of those, 195, or 17%, were assigned a Y2K grade of "Below Average," while 52, or 5%, were rated "Low."

The Weiss Y2K survey, mailed on Dec. 30, 1998 to 10,715 federally insured depository institutions, asked 13 questions about each company's timeline for completing various milestones in the Y2K remediation and testing process.

In response to one of the most important questions -- Did the institution fix and test all internal mission-critical systems before year-end 1998? -- more than one third answered "no." This was despite a regulatory mandate that these systems be "substantially" completed by Dec. 31, 1998.

"The varying interpretations of the word 'substantially' by the banks and S&Ls are creating industry-wide ambiguity," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "Many banks report they've complied with this regulatory benchmark, even though their expected completion dates remain months into the future. We believe they may need that time to complete the additional tasks of fixing and testing service providers' systems and 'non-mission-critical' computer programs."

The Weiss results contradict recently announced tallies by the FDIC -- that only 2.9% of insured institutions have failed to achieve a "satisfactory" rating in their Y2K compliance evaluations.

"This discrepancy is a mystery to me," added Dr. Weiss. "The regulators are either basing their statistics on old data or are interpreting the word 'substantially' very liberally. The end result is that consumers are not being given an accurate picture."

By evaluating the banks' actual or expected completion dates for critical tasks, the Weiss Y2K survey separates those that have truly made good progress from those that appear to be lagging behind.

On the other end of the spectrum, 177 institutions, or 15.6%, reported data that Weiss interpreted as an indication of "High" progress in their Y2K preparations. The balance, representing 62.5% of respondents, indicated a level of progress that was deemed "Average," reflecting adequate preparations at this time.

Weiss advises consumers and analysts to judge the Y2K ratings in the context of a company's overall financial strength. A bank with abundant capital resources is better equipped to remedy its Y2K problems today and cope with any consequences after the year 2000. In contrast, a bank with apparent deficiencies in both its Y2K progress and its financial stability may be at serious risk.

Institutions receiving a "Low" Y2K progress rating and a "Fair" or "Weak" financial safety rating, include: -- Stillwater NB&TC (Stillwater, Okla.) -- Centier Bank (Whiting, Ind.) -- MidSouth Bank (Monette, Ariz.)

Among institutions receiving both a "High" Y2K grade and an "Excellent" financial safety rating are: -- Piedmont FS&LA (Winston-Salem, N.C.) -- Centreville Savings Bank (West Warwick, R.I.) -- American NB&TC (Danville, Va.)

None of the very large banks surveyed by Weiss (with $1 billion or more in assets) received "Low" or "High" Y2K grades. However, banks such as Wachovia Bank (Winston-Salem, N.C.), Charter One Bank (Cleveland), and People's Bank (Bridgeport, Conn.) were graded "Below Average" for their Y2K progress, while Bank of America (San Francisco), Washington Mutual (Stockton, Calif.) and Fleet NB (Providence, R.I.) received a grade of "Average."

Weiss Calls For Industry Disclosure

Both consumers and regulators have expressed growing concerns that ill-prepared financial institutions may be unable to properly process account transaction and money transfers after Jan. 1, 2000.

In order to help quell these concerns and protect consumers from doing business with ill-prepared companies, Weiss is urging state and federal regulators to require disclosure regarding the Y2K readiness of the institutions they supervise.

In the absence of this disclosure, the Weiss Y2K Ratings are currently the only evaluations available to consumers. For $15 per company, consumers may acquire both a Weiss Y2K Rating and a Weiss Safety Rating on a financial institution by calling 800/289-9222.

If a Y2K Rating is not available, consumers will receive a Weiss Safety Rating, plus specific information on how to contact the Year 2000 project manager or financial officer at their bank.

Weiss publishes financial safety and Y2K readiness ratings on insurers, banks and S&Ls. The accuracy of its ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations. For more information, visit the Weiss Ratings web site at www.weissratings.com.

-- Sysman (y2kboard@yahoo.com), March 08, 1999

Answers

PS - I just noticed this is dated March 8, 1998. However it mentions a Dec. 1998 survey, so I think a typo. <:)=

-- Sysman (y2kboard@yahoo.com), March 08, 1999.

Sysman, there's confirmation at the Weiss site that you're correct about the date error and this is a recent report. Any readers, see:

http://www.weissratings.com/inthenew.htm

Thanks for posting the article, Sysman!

-- Bonnie Camp (bonniec@mail.odyssey.net), March 08, 1999.

Interesting that Bank of America recently published a glowing compliance report, in great detail. And Weiss rates BofA as 'Average'. Either BofA published fiction, or a Weiss 'Average' looks very good indeed.

Since other reports indicate that banking remediation in the US is somewhere around 98% complete, the most likely explanation is that the average bank is in pretty good shape. So we lose a few hundred mostly smaller banks. Can we absorbe this gracefully?

-- Flint (flintc@mindspring.com), March 08, 1999.

Bonnie's link

Nice to see you on our side of the street Bonnie! How are things at euy2k these days? <:)=

-- Sysman (y2kboard@yahoo.com), March 08, 1999.

Flint: if you believe that banks are 98% complete (even minus testing), you are either very gullible or you've been eating those mushrooms that grow in cow shit again.

-- a (a@a.a), March 08, 1999.

'a'

Where do you think banks in the US *really* stand? I can read and doubt any report as well as anyone else, and 98% sounds like a crock to me too. I think Weiss is as close as we're going to come (but it's 3 months old). And it isn't that bad, really. Not great, mind you, but not bad.

-- Flint (flintc@mindspring.com), March 08, 1999.

The Weiss results contradict recently announced tallies by the FDIC -- that only 2.9% of insured institutions have failed to achieve a "satisfactory" rating in their Y2K compliance evaluations.

"This discrepancy is a mystery to me," added Dr. Weiss. "The regulators are either basing their statistics on old data or are interpreting the word 'substantially' very liberally. The end result is that consumers are not being given an accurate picture."

Dr. Weiss' second assumption is correct. The regulators, for a variety of reasons, are being fairly lenient on banks. Believe the 98% figure at your own risk.

-- Nabi Davidson (nabi7@yahoo.com), March 08, 1999.

The bank I work at terms compliant as the s/w on its metric was remediated, tested, and put back into production. If the s/w was not reported and found later, that doesn't count. If we have noncompliant third party s/w that is not part of any metric, so it does not count. Neither does the interface testing that continues this year count. As far as my bank is concerned, it is currently 99.9% compliant. Or, that is the what the weekly bulletin says anyway.

-- Y2K Geek (y2kgeek@yippiekiyah.com), March 08, 1999.