AL 99-8
Subject: Additional Year 2000 Guidance on Contingency Planning
Date: May 10, 1999 

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

This advisory is being sent to alert you to the recent release of
FFIEC guidance, "Additional Questions and Answers Concerning Year
2000 Business Resumption Contingency Planning."  The guidance
clarifies FFIEC expectations for the completion of the validation
phase of business resumption contingency planning by June 30, 1999,
documentation requirements, and the role of "event planning" in the
development of business resumption contingency plans.

FFIEC guidance issued last year directed financial institutions to
develop business resumption contingency plans and to validate those
contingency plans by designing a method to test them by June 30,
1999.  Accordingly, the FFIEC expects financial institutions to
complete the following by June 30: (1) review of the business
resumption contingency plan and validation processes by a qualified
and independent party; and (2) review and approval of the business
resumption contingency plan and the method of validation of the
business resumption contingency plan by senior management and the
board of directors.  The attached guidance clarifies that financial
institutions may execute tests of business resumption contingency
plans after the June 30, 1999 milestone provided that such tests
are conducted   early enough to allow ample time to make necessary
changes and to retest business resumption contingency plans, if
necessary.  Institutions should report to their board of directors
on the outcome of business resumption contingency plan tests.

The FFIEC defines "event planning" as a proactive and detailed
planning process that covers specific operations prior to and
during the century date change.  It entails monitoring and
detecting problems and resolving issues related to whether and how
to implement business resumption contingency plans.  Event planning
is a sound risk management practice that can make Year 2000
business resumption contingency plans more effective.  The FFIEC
encourages, but does not require, financial institutions to develop
event plans.  However, operationally complex institutions or
institutions that are especially vulnerable to Year 2000-related
risks should give special consideration to developing event plans. 

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

     
                                                     
Emory W. Rushton
Senior Deputy Comptroller, Bank Supervision Policy

Attachment