, the proposed rules would address the following : • creditors would be required to provide consumers a reasonable amount of time to make payments before they are considered late. • as a general rule, for accounts having multiple interest rates for different balances, creditors would be prohibited from maximizing interest charges by applying payments exceeding the minimum to the lowest rate balance first. • creditors would no longer be permitted to increase the interest rate on existing account balances at any time for any reason. instead, card issuers could only apply a higher rate to the existing balance under limited circumstances, such as when a consumer has been delinquent for 30 days. of course, creditors could still increase the rate on new transactions and could offer variable - rate cards that have the rate on existing balances adjust based on changes to an index. • creditors could no longer accrue finance charges using the two - cycle balance computation method. the rules also prohibit a practice associated with the issuance of some subprime credit cards, in which most of the credit limit is used for security deposits and high fees imposed at account opening before the consumer actually receives the card. in addition to rules for credit cards, our proposal also addresses potentially abusive practices in connection with banks'payment of overdrafts to ensure that consumers have a choice of obtaining overdraft protection and receive information related to its service and costs. conclusion a robust, innovative, and competitive consumer finance market is crucial to a healthy economy and, as i described earlier, can provide significant benefits to consumers. such a market works most effectively and brings the greatest benefits when consumers are wellinformed and are not subject to abusive practices. the federal reserve is working diligently to best use its authorities to provide both creditors and consumers with rules that strike the right balance between ensuring that consumers receive useful information at an appropriate time and restricting certain practices, while at the same time minimizing the risk of unintended consequences and the imposition of unnecessary costs that could reduce the benefits of a vital consumer finance marketplace.

the mandate - consistent inflation rate for some time. of course, forecasts of inflation, as of other key economic variables, are uncertain and must be regularly updated with the arrival of new information. as of june, the longer - run unemployment projections in the sep had a central tendency of about 5 to 5 – 1 / 4 percent – about 1 / 4 percentage point higher than a year earlier – and a couple of participants ’ projections were even higher at around 6 to 6 – 1 / 4 percent. the evolution of these projections and the diversity of views reflect the characteristics that i noted earlier : the sustainable rate of unemployment may vary over time, and estimates of its value are subject to considerable uncertainty. nonetheless, with an actual unemployment rate of nearly 10 percent, unemployment is clearly too high relative to estimates of its sustainable rate. moreover, with output growth over the next year expected to be only modestly above its longer - term trend, high unemployment is currently forecast to persist for some time. monetary policy tools : benefits and costs given the committee ’ s objectives, there would appear – all else being equal – to be a case for further action. however, as i indicated earlier, one of the implications of a low - inflation environment is that policy is more likely to be constrained by the fact that nominal interest rates cannot be reduced below zero. indeed, the federal reserve reduced its target for the federal funds rate to a range of 0 to 25 basis points almost two years ago, in december 2008. further policy accommodation is certainly possible even with the overnight interest rate at zero, but nonconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used. for example, a means of providing additional monetary stimulus, if warranted, would be to expand the federal reserve ’ s holdings of longer - term securities. 5 empirical evidence suggests that our previous program of securities purchases was successful in bringing down longer - term interest rates and thereby supporting the economic recovery. 6 a similar program conducted by the bank of england also appears to have had benefits. however, possible costs must be weighed against the potential benefits of nonconventional policies. one disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public. these factors have dictated that the for further discussion of unconventional policy tools, see bern