Legislation before Congress would give legal protection to banks that make erroneous year-2000 disclosures but would limit their ability to collect punitive damages for errors caused by vendors and software makers.

One bill, introduced in the House on July 16 by California Republicans David T. Dreier and Christopher Cox, would protect computer and software companies from paying punitive damages for year-2000 errors, provided the companies offered to repair or replace the affected systems. Plaintiffs could collect for business losses and the costs of repair.

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