30 ), pp. 6408 – 6620. see cfpb ( 2013 ), “ ability to repay standards under the truth in lending act ( regulation z ), ” notice of proposed rulemaking, federal register, vol. 78 ( january 30 ), pp. 6622 - 6672. see cfpb ( 2013 ), “ mortgage servicing rules under the real estate settlement procedures act ( regulation x ), final rule ; and cfpb ( 2013 ), “ mortgage servicing rules under the truth in lending act ( regulation z ) “ final rule ( accessed january 31, 2013 ). bis central bankers ’ speeches discussed in a recent speech and will touch upon later in my remarks, federal reserve research has shown that ( 1 ) community banks are important lenders in the mortgage market, ( 2 ) those mortgage loans represent a significant portion of community bank lending, and ( 3 ) community banks are quite responsible in their practices. 5 at the federal reserve, we have formalized our process for considering the unique characteristics of community banks as we craft regulatory and supervisory policies. a few years ago, we created a subcommittee of the board, which i chair, that makes recommendations about matters related to community bank supervision and regulation. this subcommittee reviews all regulatory proposals and supervisory guidance with an eye toward the possible effects on community banks. remembering the days when i had to find time to read all those new regulations stacked up on my desk, i have insisted that all new proposals and rules start with a clear statement of their applicability to community banks so that bankers can spend their time on the rules and guidance that apply to them. this approach was put into practice in a different way last year, when the banking agencies issued proposals for capital regulations that incorporated requirements of the dodd - frank act and the basel agreement. 6 to help community banks identify the provisions that affected them and submit their comments more easily, the proposal included a short summary of the provisions that were most likely to affect community banks. we received more than 2, 000 comments, many from community banks, and we are reviewing them. it ’ s too early in the process to know how we and the other agencies are going to address the issues raised, or when final rules may be released. but what i can promise is that before we issue final capital rules, we will do everything possible to address the concerns that have been expressed by community bankers and still achieve the goal of having strong levels of high - quality capital – built up over a

suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased. at the same time, the outlook for inflation has improved somewhat, though it remains uncertain. in light of these developments, the federal reserve will need to consider whether the current stance of policy remains appropriate. the intensification of the financial crisis in recent weeks made clear that a more powerful and comprehensive approach involving the fiscal authorities was needed to solve these problems. on that basis, the secretary of the treasury, with the support of the federal reserve, went to the congress to ask for a substantial program aimed at stabilizing our financial markets. as you know, last week the congress passed and the president signed the emergency economic stabilization act. this legislation provides important new tools for addressing the distress in financial markets and thus mitigating the risks to the economy. the act adds broad, flexible authorities to buy troubled assets, to provide guarantees, and to directly strengthen the balance sheets of individual institutions. notably, the legislation establishes a new troubled asset relief program, or tarp, under which the treasury is authorized to purchase as much as $ 700billion of troubled mortgages, mortgage - related securities, and other financial instruments from financial firms that are regulated under u. s. law and have significant operations in the united states. the act also raises the limit on deposit insurance at banks and credit unions from $ 100, 000 to $ 250, 000 per account, a step that should reinforce depositors'confidence in the security of their funds and thus help to stabilize depository institutions. and, as i mentioned, the act provides the federal reserve the authority to pay interest on reserves, which will allow us to better manage the federal funds rate as we provide liquidity to the markets. we will begin exercising that authority this week. the tarp's purchases of illiquid assets from banks and other financial institutions will create liquidity and promote price discovery in the markets for these assets. this in turn will reduce investor uncertainty about the current value and prospects of financial institutions, enabling banks and other institutions to raise capital and increasing the willingness of counterparties to engage. more generally, increased liquidity and transparency in pricing will help to restore confidence in our financial markets and promote more normal functioning. with time, strengthening our financial institutions and markets will allow credit to begin flowing again, supporting economic growth. the interests of taxpayers are carefully protected under this program. first, the congress has required extensive controls and oversight to ensure