1998 Ron Paul 13:1
Mr. PAUL.
Mr. Speaker, this Legislation,
H.R. 3116, will not solve the Year 2000 problem. Giving some financial regulators “statutory
parity” with other regulators will not solve
the problem. Everyone will have to take responsibility
to secure that their own systems
will be Year 2000-compliant. We must hope
that the government will be as diligent in its
compliance with the so-called Millennium Bug
problem as it want the private sector to be.
1998 Ron Paul 13:2
The General Accounting Office (GAO) has
reported unfavorably on the FDIC’s readiness. Before the Subcommittee on Financial Services
and Technology, Committee on Banking,
Housing and Urban Affairs, US Senate, Jack
L. Brock, Jr., Director, Governmentwide and
Defense Information Systems, testified on
February 10, 1998 (Year 2000 Computing Crisis:
Federal Deposit Insurance Corporation’s
Efforts to Ensure Bank’s Systems Are Year
2000 Compliant) that the Federal Deposit Insurance
Corporation (FDIC) has not met its
own “y2k-compliant” standards. According to
GAO, the FDIC has not yet completed the assessment
phase of the remediation process,
despite its own standard that banks under the
agency’s supervision should have completed
this phase by the end of the third quarter of
1997.
1998 Ron Paul 13:3
The bill requires the regulators to provide information
(seminars, etc.), make available to
financial institutions model approaches to address
the Year 2000 problem, and to give the
regulators examination authority to examine
third party service provides under contract to
federally-insured institutions.
1998 Ron Paul 13:4
James Mills, of NAFCU, testified before the
House Committee on Banking and Financial
Services,
“Historically, the role of providing
education and training is one best performed
by the private sector, namely trade associations
and industry-related organizations . . . Rather than require federal agencies to offer
seminars, perhaps any legislative efforts
should require federal agencies to participate
in such programs or make it advisable and
permissible to participate.”
NAFCU believes
that the focus of H.R. 3116 should be strictly
limited to ensuring compliance. In its present
form, H.R. 3116 contains a broad and permanent
expansion of NCUA’s examination and
regulatory authority . . . Legitimate questions
may be raised as to whether, absent the year
2000 issue, NCUA, as a federal financial regulatory
agency, should have the authority not
just to examine but to actually regulate private
business enterprises incorporated under the
laws of various states. The authority given to
NCUA in H.R. 3116, is not limited to the examination
and regulation of credit unions, but
would allow NCUA to examine and regulate
third-party businesses, vendors and outside
providers. Do the members of the Committee
intend to give NCUA authority to regulate private
entities?”
1998 Ron Paul 13:5
Ellen Seidman, Director OTS, added,
“Clearly, the primary responsibility and liability
for Year 2000 compliance rests with the regulated
institutions themselves, including those
that rely on service providers . . . Some service
providers, however, have been resistant to
these contractual provisions and, as a result,
thrifts have been hindered in their ability to
contract for services.”
1998 Ron Paul 13:6
This bill raises legal liability questions that
may actually thwart a financial institution’s
ability to address the y2k problem more effectively. Introducing legislation on the y2k issue
would only give more people more incentive to
sue companies which are not compliant. How
does the bill define “year 2000 compliance”?
1998 Ron Paul 13:7
It isn’t clear. Such ambiguity only causes further
problems. The real problem with y2k isn’t
the computers, its the people. More legislation
will only compound the problem.
1998 Ron Paul 13:8
Year 2000 issues with computers cause numerous
headaches but by no means
unsolvable problems. Solutions exist, and
since we do exist in a relatively free market,
we should allow it to work.
Notes:
1998 Ron Paul Chapter 13
The text of this chapter was insrted in CongressionalRecord as an extension of remarks, and was not spoken on the House floor.
1998 Ron Paul 13:1 as it want probably should have been as it wants.
1998 Ron Paul 13:3 third party probably should have been hyphenated: third-party.
service provides probably should have been service providers.
federally-insured probably should not have been hyphenated: federally insured.
