more effective. home ownership and equity protection act i would now like to turn to important new consumer protections that the federal reserve board adopted earlier this week. these new rules, which implement hoepa, were put into place to protect consumers and to help prevent a recurrence of the problems that we are now facing. the current wave of foreclosures is taking a very real toll on families and their communities, no place more so than in predominantly minority communities, where subprime loans were particularly common. the u. s. mortgage market has seen rapid innovation in recent years. changes, such as automated underwriting models, the evolution of the secondary markets, and specialization, have had many positive effects. some changes in practices, however, have not been so salutary. abusive loans that strip borrowers'equity or cause them to lose their homes should not be tolerated. too many homeowners and communities are suffering today because of these practices, and the federal reserve board's rules will better protect consumers while preserving their access to credit as they make some of the most important financial decisions of their lives. last december, the board proposed changes using our authority under the home ownership and equity protection act. in formulating that proposal, the board sought a wide range of input and information through hearings and meetings throughout the country. in response, we received, and considered, over 4, 500 comment letters sent to us from community groups, industry participants, consumer advocates, and other interested individuals. we engaged in outreach to commenters to get clarification of their concerns and weigh competing viewpoints. we gathered available data and conducted updated analyses. we undertook onthe - ground consumer testing, which has proven to be an invaluable tool for us in determining policy effectiveness, to gauge the practical effects of one of the proposed rules on individual consumers. listening carefully to the commenters, collecting and analyzing data, and undertaking consumer testing, i believe, have led to more - effective and improved final rules. our goal throughout this process has been to protect borrowers from practices that are unfair or deceptive and to preserve the availability of credit from responsible mortgage lenders. these rules expand upon interagency guidance issued last year on subprime loans. that guidance, however, only focused on certain specific subprime products, hybrid adjustablerate mortgages, such as so called 2 / 28s and 3 / 27s, and only applied to federally supervised institutions. our rules now apply

with a lender, which is not necessarily true either. the firm tried to correct these misunderstandings, but no matter what it did to change the language, the forms continued to confuse consumers more than inform them. our consumer testing led us to the conclusion that our approach was not serving its intent – that is, to better inform consumers. we are continuing to try to find an approach that would be effective, but we did not want to hold up all the other consumer protections while we worked on it. as a result, we decided to withdraw the proposed provision on mortgage broker compensation, and we will continue to explore other approaches as part of the ongoing update of our mortgage rules already under way. some may have preferred that we stick with our proposal, but creating a rule that informed consumers in theory, but only served to confuse them in practice, would have helped no one. conclusion in closing, i would like to underscore the federal reserve's commitment to preserving and supporting minority depository institutions. i look forward to continuing our constructive dialogue on finding the best and most practical ways to address the challenges that these banks confront. i am confident that we will be successful in ensuring that these companies remain strong and continue to provide critical financial support to their communities. i also want to stress that finalizing our hoepa rules does not represent the end of our efforts to improve transparency and consumer protections in mortgage lending. we will continue to work diligently to determine how best to address the issue of yield spread premiums. further, we will collaborate with our partner agencies to enforce these rules and to monitor their impact on the market to ensure that they are effective in achieving their goals of protecting borrowers from abusive practices and preserving the availability of credit from responsible mortgage lenders.