In retrospect, Stan Callahan says he should have thought twice before filling out Weiss Ratings' Year 2000 survey.
Callahan, the Amarillo National Bank's (ANB) Y2K project manager, says ANB was the only bank in Amarillo, Texas, that responded to the Y2K readiness questionnaire. For its efforts, ANB was rewarded with a "low" level of progress, one of 54 banks out of 1,500 nationwide that received such a rating by Weiss, a Florida-based financial-ratings firm. No ratings were assigned to banks that didn't respond.
"We got a bum rap," complains Callahan, who says his bank is well on its way to preparing its computers for the Year 2000. "We feel that this is a company that is trying to take advantage of the Y2K scare."
But Martin Weiss, chairman of Weiss Ratings, says that while his firm is motivated by money, he is also trying to address one of the most difficult aspects of the Year 2000 problem: the lack of full disclosure.
Current government regulations prohibit savings associations from releasing their federal Year 2000 examination ratings, as well as other information contained in government Y2K reports. Weiss and other banking experts say the prohibition creates a black hole that is often filled with biased information, unfounded speculation, or outright disinformation.
"The real problem in the industry is the lack of disclosure," says Weiss. "I think the authorities are fanning the fears of consumers by cooperating with the banks to keep this information secret."
Weiss' company gave "low" ratings to banks that reported 25 percent or less of their systems were in Y2K compliance on 30 June. The ratings of banks and thrift associations are available to the public for US$15 per query or $149 for the complete list.
Donna Tanoue, chairwoman of the Federal Deposit Insurance Corporation, testified before a House committee in September that the FDIC has concerns about publicizing the federal ratings. If the ratings are made public, "uninformed users of ratings reports may place undue reliance on them or misinterpret them," Tanoue told the House committee on banking and financial services.
Critics say that smacks of paternalism, and that the prohibition, rather than protecting banks and consumers, ends up hurting them. The real rationale for the ban, says Weiss, is that a low government rating could put a bank out of business.
