Lawmakers and regulators are accelerating their output of year-2000 bills and guidelines.

Two bills that would limit liability for year-2000 computer errors were introduced in January, and a third is reportedly on the way.

A fourth would help small businesses get government-guaranteed loans to fix their year-2000 problems. And on the agency front, regulators issued guidelines Wednesday designed to help banks reassure customers that their money is safe.

Liability protection is drawing strong support from the financial services industry.

"We are vulnerable to events that may be beyond our control," Marshall N. Carter, chairman and chief executive officer of Boston-based State Street Corp., told the Senate Commerce Committee last week..

But a Washington consultant said it is unclear whether liability bills will be enacted. Similar legislation failed last year, and trial lawyers are waging war on the bills.

"Delay is Congress' natural state," said Karen Shaw Petrou, president of the industry consulting firm ISD/Shaw. "They don't move fast."

A Senate bill, introduced by Commerce Committee Chairman John McCain, R- Ariz., would cap damages at the economic loss suffered by a plaintiff, provided the defendants made a good-faith effort to address year-2000 problems.

The House bill, introduced by Banking Committee member Donald A. Manzullo, R-Ill., would require that most year-2000 disputes be settled by arbitration. Rep. David T. Dreier, R-Calif., is expected to issue another bill shortly, which reportedly would cap punitive damages and attorneys' fees.

Banks and other financial services companies could be vulnerable to a variety of year-2000-related claims. For instance, if a customer's check bounced at a mortgage closing due to bank error, the bank could be liable.

But Mr. Carter said banks have spent millions to shore up their systems, making such errors unlikely. State Street has committed $200 million to combating the millennium bug.

Banks have more to fear from lawsuits holding them accountable for errors by third parties, industry sources said.

For example, Ms. Petrou said, a trustee might sue because a company in which a bank invested suffered a year-2000 failure, leading to a decline in the trust's value. The suit could allege that the bank should have known the company was at risk.

An investor might also sue a bank for costly trade interruptions resulting from computer failure at a foreign stock exchange, Ms. Petrou said.

Mr. Carter said State Street could not possibly take responsibility for the year-2000 readiness of the 1,800 vendors and 100 banks it interacts with.

Late last month, Senate Banking Committee member Christopher S. Bond, R- Mo., introduced a bill that would let the Small Business Administration guarantee loans to help small businesses fix year-2000 problems.

The loan guarantees would be made under the SBA's 7a program, though financial terms and underwriting standards would be relaxed.

On Wednesday, the five regulators of banks, thrifts, and credit unions issued guidelines for year-2000 customer awareness programs. The two pages of guidelines are a supplement to guidelines issued last May.

The new release encourages institutions to explain the year-2000 issue to customers, describe the bank's commitment to resolving the problem, mention that federal deposit insurance covers losses to $100,000, and sketch the bank's contingency plans.

R. Lamar Brantley, director of technical support at America's Community Bankers, said dialogue "helps give the customer some solid information on which to act, so hopefully they don't do irrational things" - closing their accounts or withdrawing huge sums.

The millennium bug is a programming error that could cause computers to mistakenly read the year-2000 as the year 1900. About 97% of the nation's banks and thrifts have made "satisfactory" progress in efforts to address the flaw, according to federal regulators.

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