Financial regulator cite EFT vendor for Y2K, NCUA issues Y2K LUAgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Credit Union Times Year 2000 in the pages of Credit Union Times
Financial regulator cite EFT vendor for Y2K, NCUA issues Y2K LUA By PAUL GENTILE CU Times Associate Editor
WASHINGTON-For the second time in three months, financial regulators, including NCUA, have ordered a vendor serving financials to expedite its Year 2000 efforts.
Exercising the powers given to them by the Examination Parity Act, financial regulators, have ordered EFT-processor TransAlliance, L.P. Bellevue, Wash., to take steps to ensure the Year 2000 readiness of its systems.
The financial regulators term such an action as an "agreement" with the vendor. It is an action regulators take to serve notice to the vendor that they are concerned about the Y2K progress the vendor is making. This was last done in late March, when regulators entered into a similar agreement with First Data Corp., Atlanta, for one of its credit card processing systems.
"The federal banking agencies are entering into this Agreement to ensure that the hardware and software used by TransAlliance to deliver mission-critical services to its financial institution customers are Year 2000 ready..." stated the regulators in the agreement.
The agreement calls for TransAlliance to take "such actions as necessary" so that its financial institution clients can test their TransAlliance systems by June 30, 1999. If it can not, TransAlliance is to, in writing, notify the regulators and its clients, that it is not on target for Year 2000 readiness.
TransAlliance provides EFT services for 800 financial institutions, including about 250 CUs, located in the Western region of the U.S. and Canada. The company is jointly owned by members of the Exchange ATM/POS network and EDS. TransAlliance is headed by CEO James Benson, a former EDS employee, who was recently given the position.
Under the agreement, TransAlliance must now provide biweekly written reports to the federal banking agencies and the state banking agencies, updating them on its Y2K readiness progress.
According to NCUA, the agreement with TransAlliance came at the appropriate time and gives the EFT company plenty of time to meet the June 30, 1999 deadline, but there are, of course, no guarantees.
In a related issue, NCUA has issued a Letter of Understanding and Agreement to the $10 million Wallingford Municipal Employees FCU, Conn. for Y2K-related reasons.
According to NCUA, the LUA defines the actions officers of the CU must take to "successfully correct numerous deficiencies in management and the Year 2000 preparations...to minimize the opportunity for further operational deterioration."
As '99 progresses, Y2K-related LUAs have become more common. Just last month, NCUA issued four LUAs to CUs due to Y2K preparations. At press time, NCUA had taken 519 Y2K-related actions against credit unions.
-- Arlin H. Adams (firstname.lastname@example.org), June 02, 1999
"According to NCUA, the LUA defines the actions officers of the CU must take to "successfully correct numerous deficiencies in management and the Year 2000 preparations...to minimize the opportunity for further operational deterioration."
Further operational deterioration? Could it be that the Federal Regulators are pushing because problems have already caused deterioration in the operations of Credit Unions? Sounds like that to me.
Hey, no problem, right?
-- Michael Taylor (email@example.com), June 02, 1999.