First Data Corp. signed an agreement with regulators Tuesday to correct a year-2000 computer glitch in part of its credit card merchant processing business.
A joint action of all five depository institution regulatory agencies, the order relates to less than 10% of the business of Atlanta-based First Data, the leading transaction processor in the bank card business. First Data agreed to submit a correction plan within 15 days, test the fixes by June 30 and complete them by July 11.
This is the second time that regulators have taken action against a financial industry service provider. Last year they cited Nova Financial Corp., a Georgia bank service bureau not related to a similarly named merchant processor.
Examiners said they spotted a problem within the Envoy processing system in Nashville which operates as part of the First Data Merchant Services subsidiary and serves more than 200 banks, thrifts, and credit unions.
The company may not sign up new customers for the Envoy system until the problems are corrected.
"We are confident in our ability to quickly complete testing and finish the remediation of the Nashville platform as planned," said First Data president and chief operating officer Charles Fote.
First Data had planned to switch its Nashville facility to a new platform that is year-2000 ready, a spokesman said, but delays in the conversion forced it in February to decide to fix the glitches instead.