Circular
Regulation CC Amendments to Facilitate Y2K Efforts by Banks
April 2, 1999
Circular No. 11146

To All Depository Institutions and Others
Concerned in the Second Federal Reserve District:

Our Circular No. 11133, dated January 26, 1999, announced a proposal by the Board of Governors of the Federal Reserve System to allow banks that consummate merger transactions on or after July 1, 1998, and before June 1, 1999, greater time to implement software changes related to the merger, in order to facilitate their efforts to address Year 2000 and leap year computer problems. The Board has decided to adopt the proposal as a final rule, extending, however, the proposal's transition period from June 1, 1999 to March 1, 2000. The following is from the Board's announcement of this action:

The amendments will allow banks that consummate merger transactions on or after July 1, 1998, and before March 1, 2000, greater time to implement software changes related to the merger.

The amendments allow these banks to be treated as separate banks until March 1, 2001. Beginning in March 2000, banks that merge will be subject to the normal one-year transition period.

The Board's action recognizes that banks are currently dedicating their automation resources to addressing Year 2000 and leap year computer problems.

The extension of the merger transition period will enable merged banks that were Year 2000 compliant to be treated as separate entities, and to delay merging their systems until after the key century rollover and leap year events of the Year 2000.

This will enable these banks to avoid re-programming and re-testing Year 2000 compliant systems prior to the spring of the Year 2000. The extension should also help ensure that banks have sufficient resources to address unanticipated Year 2000 problems that may arise at the turn of the century.

The Board's official notice, as published in the Federal Register of March 26 is available as a PDF file (pdf - 20kb).