Regulators Watch ATM Service Co.
WASHINGTON (AP) _ Banking regulators, worried about the Year 2000 readiness of a big ATM service company in the Northwest, have ordered the company to get in shape by June 30 or face possible contract cancellations by some of its 750 bank customers.
The company, TransAlliance LP, agreed to the regulators’ conditions in a signed document, the Federal Reserve and four other agencies announced Friday.
Under the agreement, TransAlliance will make needed changes in its computer systems so that all its bank customers will be able to successfully complete their Year 2000 testing by June 30 _ the deadline set for banks by the federal government.
TransAlliance also agreed to have its own systems ready by that date.
In the event the conditions weren’t met, the banks that TransAlliance serves would be allowed without penalty to annul their contracts with the company.
The regulators also would have the authority to impose fines on the company, but that isn’t mentioned in the agreement.
TransAlliance, based in Bellevue, Wash., provides automated teller machine services, including electronic transaction services, to some 750 banks, thrifts and credit unions in the Northwest and Canada.
Electronic Data Systems, the technology company founded by billionaire Ross Perot, owns 50 percent of TransAlliance. The other half is owned by a group of 24 banks in the Northwest which operates the Exchange ATM network.
``We are pleased that we could agree with the regulators on the steps we are taking to ensure Y2K readiness″ by June 30, James D. Benson, TransAlliance’s president and chief executive officer, said in a statement. ``We are confident we will meet this date.″
Government regulators have lauded, for the most part, the nation’s financial industry for its work preparing for the technology problem, when some computers originally programmed to recognize only the last two digits of a year could interpret 2000 as 1900.
The agreement also was signed by the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, which oversees nationally chartered banks, and Washington state’s Department of Financial Institutions.