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Lighten Your Y2K Load

There's enough to do without having to conduct a complete inventory of a commercial loan applicant's Year 2000 vulnerability and compliance level. Besides, the problem sits primarily with the customer. Solve your workload and customer awareness problems with one stroke. Have the applicant prepare a Y2K inventory. Ask them to identify all the automated and computer-supported functions they use. Ask them to describe the functions (such as billing, payroll, manufacturing, inventory management) that are automated.

They should also quantify the extent to which the business relies on these functions or the extent to which the business will be damaged if the systems fail. Use a scale of one to ten - most people are comfortable with that. It also forces a little more hard thinking than a scale of one to four.Finally, they should describe what compliance steps they have taken and how they have taken them. For example, actual testing should score high, whereas a statement of assurance from a vendor counts low (very low).

Make this procedure a routine part of all commercial loan applications. It transfers the burden from your staff. It should make the customer more aware of the issues and dangers involved. And it gives the customer guidance on what they should be doing.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 3, 3/98

First published on 03/01/1998

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