Banks unprepared for the year-2000 date change by July 31 must keep a digital copy of their account data for safekeeping, the Federal Deposit Insurance Corp. said Thursday.
The decision, approved unanimously, is designed to provide the FDIC with accurate loan and deposit data in the event it has to sell or dissolve a failed institution.
Affected banks and thrifts will be those with less than "satisfactory" year-2000 ratings as of July 31. These institutions must begin copying account data on Dec. 24, a week before the Jan. 1 rollover, and continue through June 30, 2000, or until they improve their rating.
As of mid-May, only 205 of 10,400 FDIC-insured institutions had a rating of "needs improvement" or "unsatisfactory." That's a significant improvement from 357 in mid-March. The FDIC expects the number to decline even further by July 31.
"We must have a way to make certain we can access the consumer account information in the remote event that something should happen," said Mitchell L. Glassman, the FDIC's deputy director for resolutions and receiverships.
To protect customer confidentiality, Mr. Glassman said, the FDIC will not access a bank's account records unless it is appointed receiver. Moreover, a bank upgraded to "satisfactory" after July 31 will not have to copy account data.
The digital copy could help the FDIC in several ways. Potential acquirers of a failed institution would be assured of having uncorrupted account data. The copy would ensure the smooth transfer of customer information from one data processor to another, and allow for uninterrupted loan servicing.
If the FDIC is unable to find a buyer, the data would ensure that insured deposits were repaid swiftly and accurately, the agency said.
The FDIC specified 34 pieces of information to be copied for each deposit account, and 74 for each loan, including borrower name and interest rate.
Though the FDIC adopted this measure as an interim final rule effective 30 days after publication in the Federal Register, it is accepting comments for 30 days.