This sounds like a hold-over from an older system. I've heard stories of certain universities and banks using old mainframe systems for central authentication.

This sounds like a hold-over from an older system. I've heard stories of certain universities and banks using old mainframe systems for central authentication. In one instance I've heard that passwords were stored in plaintext and truncated to 8 characters, uppercase only. The main reason, that I've heard at least, for not upgrading these systems is cost and complexity. Why upgrade a system that is working for $$$$ when we can restrict passwords and add some basic 'security' for $.