ahead in May to the first Internet bank, has created a new task force on electronic banking. "We are looking at the whole range of electronic banking issues from the Internet to smart cards," said Jerry Jones, a senior program manager at the agency and chairman of the task force. "We will identify the risks to financial institutions and to their customers, and see how OTS needs to change to ensure that thrift institutions are operating safely and soundly in the age of electronic banking." Security First Network Bank of Pineville, Ky., a subsidiary of Louisville's Cardinal Bancshares, started offering checking accounts and other services on the Internet Oct. 18. Cardinal had sought and received OTS approval, even though there are no laws or regulations restricting Internet banking. John Downey, the thrift regulator's executive director for supervision said the agency needs to act now to make sure the system has proper safeguards. "We need to get in front and make sure that prudent policies, procedures, and controls are in place to maintain the stability of the industry and the integrity of the payment system," he said.

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