AL 98-18
Subject: Year 2000 Q&A Guidance
Date: December 10, 1998

TO:  Chief Executive Officers of National Banks, Federal
     Branches, Service Providers, Software Vendors, Department
     and Division Heads, and Examining Personnel


This advisory is to alert you to the recent release of FFIEC
guidance, "Questions and Answers Concerning Year 2000 Contingency
Planning."  The guidance responds to frequently asked questions
from financial institutions concerning Year 2000 contingency
planning.  The questions and answers primarily focus on Year 2000
business resumption contingency planning.  The guidance states that
each financial institution is expected to have an effective
business resumption contingency plan to establish a course of
action in the event of a Year 2000 disruption.  Such a plan will
help an institution to resume operations in an orderly way and to
avoid any panic and confusion that may accompany a Year 2000
disruption.  The Year 2000 business resumption contingency plan
also should establish management controls to minimize risks and
losses.  Financial institutions can augment existing business
resumption and disaster recovery plans or develop supplemental Year
2000 business resumption contingency plans to capture Year 2000-related risks. 

The FFIEC Q&A document establishes a target date of June 30, 1999,
to substantially complete all Year 2000 business resumption
contingency planning.  In a September 14 letter to chief executive
officers of national banks, Acting Comptroller Julie Williams
stated that the OCC expects financial institutions to have
completed the first phase (develop planning guidelines) and to have
started the second phase (business impact analysis) by September
30.  That letter also stated that national banks are expected to be
well underway in completing the third and fourth phases
(formulating and validating Year 2000 business resumption
contingency) by December 31.  The OCC will continue to monitor a
financial institution's progress in developing and validating Year
2000 business resumption contingency plans during upcoming Year
2000 examinations and will assess whether financial institutions
are on target to meet the June 30, 1999 completion date. 

Among other things, the FFIEC Q&A document states that financial
institutions should consider the following in developing Year 2000
business resumption contingency plans:  

     Seek ways to educate customers about the Year 2000 problem and
     explain what financial institutions are doing about the
     problem in order to minimize unwarranted  public alarm;

     Consider the cash demands of a financial institution's
     customers;  

     Anticipate funding needs in late 1999 and early 2000;

     Train financial institution employees to ensure that they are
     prepared to implement Year 2000 business resumption
     contingency plans; and

The FFIEC guidance is available on the OCC's homepage at
www.occ.treas.gov.  For more information on Year 2000 issues,
contact the Year 2000 Supervision Policy Division at (202)
874-2340.




                                                     
Emory W. Rushton
Senior Deputy Comptroller, Bank Supervision Policy

Attachment