The FDIC’s Year 2000 Guarantee: “Insured Deposits Will be Fully Protected”

FDIC Chairman Donna Tanoue has made the Year 2000 issue a priority for the agency. FDIC Consumer News asked Chairman Tanoue to give our readers insights on how the FDIC’s Y2K efforts will serve the interests of banking customers. Chairman Tanoue, what do you see as the key roles for the FDIC in protecting the consumer against Year 2000 problems?

FDIC Chairman Donna Tanoue Photo: W.W. Reid/FDIC

I believe the FDIC has two roles.

First, the FDIC has the unique responsibility of maintaining public confidence in banks and savings institutions. We are reminding banking customers that their insured deposits are safe, just as they have been throughout the 65-year history of the FDIC.

Our second role is as a bank regulator. The FDIC and our sister regulators on the federal and state level are monitoring the steps that institutions are taking to prevent disruptions in service in the Year 2000.

You mentioned the FDIC’s role of maintaining public confidence. Consumers probably want the FDIC to guarantee that their bank or savings institution won’t have problems from the Year 2000 situation, but we can’t do that, can we?

No. Bankers are taking steps to ready their institutions for the century date change. Bankers are reviewing systems, testing computers and preparing back-up plans to cover realistic contingencies. The FDIC cannot guarantee that every one of the 10,000 banks and savings institutions we insure will have absolutely no problems from the Year 2000 date change. But we can guarantee one thing—that insured deposits will be fully protected.

What’s a good example of recent FDIC actions that you believe will be especially helpful in minimizing problems for bank customers in the Year 2000?

Well, there are a lot to choose from, but I’d like to reiterate the importance of our role as a banking supervisor. The FDIC and the other bank regulatory agencies have been very pro-active in our approach to Y2K-related supervision. At every opportunity, we have been educating bankers about what is expected of them to get their institutions Y2K-ready. Then we have been following up with on-site examinations of banking institutions as well as data service providers and software vendors that institutions use to transact business electronically. We want to know whether each institution is fully addressing the Year 2000 issue.

One last question, Chairman Tanoue. What if a consumer asked for your opinion on what he or she should know about the Year 2000 problem or should be doing to prepare for it—what would you say?

I would emphasize three points.

Number one: FDIC-insured deposits are safe, just as they always have been. The FDIC’s protection of insured deposits will not be affected by the Year 2000. The FDIC has close to $39 billion in its deposit insurance funds, and FDIC-insured deposits are backed by the full faith and credit of the United States government.

Number two: Consumers should know that the banking industry is taking actions that are designed to make sure that institutions’ computers will function in the Year 2000. Consumers may want to call or visit their own banking institution to become more familiar with what it is doing to get ready for the Year 2000.

Finally, point number three: The FDIC and other government authorities are doing everything we reasonably can to prevent problems for consumers and to ease the impact of any disruptions that may occur.