Iowa banks have lost out on a measure that would have protected them from certain lawsuits tied to the year-2000 computer bug.

Gov. Tom Vilsack vetoed a bill last week that would have shielded banks from customer lawsuits over year-2000-related computer errors by bank correspondents, data processors, or other third parties.

The legislation passed both houses overwhelmingly, but Gov. Vilsack, a Democrat, sided with some groups that opposed the bill, including the American Association of Retired Persons and the state's trial lawyers. The veto came four days before the legislative session was scheduled to end, leaving no time for a possible override.

Bankers were disappointed.

"It was a very good bill," said John Sorensen, president of the Iowa Bankers Association. "Now we're back to preparing for the event and communicating with the public" on preparations for 2000.

Four states-Colorado, North Dakota, South Dakota, and Virginia-have implemented laws to protect banks from year-2000-related lawsuits.

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