Regulators have brought formal actions against at least a dozen financial institutions they say have fallen behind in their year-2000 preparations.
The Office of the Comptroller of the Currency, which oversees about 2,600 institutions, has taken formal action against six banks and one service provider, said Daniel Stipano, the office's director of enforcement. Three other OCC-supervised banks are about to be charged for not being prepared, while three or four others, he said, are being closely monitored.
Several hundred OCC-supervised banks have had informal actions taken against them, which are not made public, Mr. Stipano said.
The Federal Deposit Insurance Corp., which oversees about 6,000 banks, has given cease-and-desist orders to seven banks. The FDIC also has issued less serious charges, including board resolutions against 163 institutions and memoranda of understanding against 70.
As the year-2000 approaches, financial regulators are cracking down on the institutions they supervise. On Tuesday securities regulators took their first actions against nearly 100 brokerage firms for not reporting year-2000 progress or reporting late. More than half of the brokerages charged by the Securities and Exchange Commission and the National Association of Securities Dealers agreed to fines as part of their settlements.
The OCC actions were taken between June and September against Heartland National Bank of Herrin, Ill.; First National Bank of Pulaski, Ill.; American Independent Bank of Gardena, Calif.; Industrial Bank of Oxon Hill, Md.; Gold Country Bank of Brownsville, Calif., and Community National Bank of Franklin, Ohio. The service provider it charged is Nova Financial Corp. of Atlanta.
The FDIC took enforcement actions against Farmers and Merchants Bank of Eatonton, Ga.; First Bank of Coastal Georgia of Pembroke, Ga.; Farmer's Bank of Union Point, Ga.; Bankers Trust of Madison, Ala.; Clovis (Calif.) Community Bank; First Bank of Childersburg of Vincent, Ala.; and an institution in Manchester, N.H., that has not been made public. The first actions occurred against the Georgia banks in November 1997.
The banks that have been formally charged represent less than 1% of those each regulator supervises. These banks earned "unsatisfactory" ratings for year-2000 compliance.
Both regulatory agencies plan to continue to closely watch their banks. They will conduct two more on-site exams over the next 12 months, in addition to quarterly reviews.