The millennium is looming, and along with it possible computer chaos. But many community banks apparently haven't noticed.

A recent survey by the Office of the Comptroller of the Currency found that about 15% of community banks were unaware of the effect that the year 2000 would have on their business technology. And another 20%, though aware, were just starting to address the potential crisis.

Many computer systems will not process information with dates beyond Dec. 31, 1999. The problem arises because programmers usually stored the year as two digits instead of four. When 2000 arrives, computers may interpret the date "00" as "1900" and therefore calculate inaccurate results.

"This is a problem the typical community bank can handle internally, but by and large they are underestimating the magnitude of the problem," said David Furnace, technology practice manager at Alex Sheshunoff Management Services Inc., Austin, Tex. "They have to approach it" as they would "any other large project."

Sheshunoff Management Services did its own survey and found that 33% of community banks were "not at all prepared" for the technological implications of 2000.

The American Bankers Association is using the results to try to nudge its smallest members to start figuring out what to do. Federal banking regulators will start asking banks about their potential computer problems this month.

Bob Stone, vice president of Kingsfield (Maine) Bank, said computer problems might be massive for banks. His $150 million-asset institution has joined a committee, organized by the Maine Association of Community Banks, that is trying to find simpler ways to assess potential computer problems.

But even if a bank can educate itself on the 2000 problem, there is only so much that smaller banks can do on their own. Ultimately, the company that designed a bank's computer system is the best qualified to make changes, industry experts said.

"To some extent, small banks are going to have to trust their vendors and regulators to ensure things go as well as they should," said Kawika Daguio, the ABA's federal representative for payment systems and technology. Regulators are asking the same questions of software designers that bankers should be asking.

The Federal Deposit Insurance Corp. is assessing some of the larger software companies' year-2000 compliance on a quarterly basis. And banks can request copies of these assessments. "The onus is still on the banks," Sheshunoff's Mr. Furnace said.

Some, like Bank of Dooley in Vienna, Ga., say they're trying to stay on top of the issue. The $43 million-asset bank has instructed its 22 employees to include year-2000 checks on a spot basis as part of everyday operations.

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